Prosecutors on Friday demanded a four-year prison sentence for Takafumi Horie, the former president of Internet firm Livedoor Co., for alleged violations of the Securities and Exchange Law.
“He deceived stockholders and investors without any remorse, for the benefit of his company and for his own profit,” prosecutors said in a statement in final arguments in the high-profile Tokyo District Court trial.
Prosecutors accused Horie, a one-time Internet business icon, of “significantly lacking a law-abiding spirit,” for alleged illegalities in booking proceeds from the sale of Livedoor shares as profits.
Horie, 34, in dark suit, sat impassively as the statements were read.
The outspoken entrepreneur did not have a chance to answer the charges Friday but is expected to rebut the accusations in his final plea, scheduled for Jan. 26. A verdict will likely be handed down by presiding Judge Toshiyuki Kosaka in March.
Horie is charged with ordering four senior Livedoor’s executives to report a pretax profit of 5 billion yen for the business year through September 2004 instead of the company’s actual loss of 300 million yen.
The indictment alleges that in addition to incorrectly reporting the Internet startup’s profit, Horie tried to manipulate the market by disseminating false information on the takeover of a publisher by Livedoor affiliate Livedoor Marketing in an effort to ramp up the company’s stock price.
“These were extremely vicious crimes that were committed in an attempt to gain company profit,” the prosecution said.
Horie, who stands accused of masterminding the fraud, has maintained his innocence since the trial began in September.
In previous court sessions, Horie denied committing fraud, testifying that Livedoor former Chief Financial Officer Ryoji Miyauchi was responsible for any misdeeds.
Horie argued that he was never told that it was illegal to report the stock sales as profit, and that he had no control over accounting methods at the company.
“I didn’t receive any explanations during company meetings,” he said at a session in November, contradicting the testimony of Miyauchi and others witnesses, who alleged Horie was directly involved in the financial decisions taken by Livedoor.
Four former Livedoor executives have pleaded guilty to securities fraud in separate trials, and have all testified against Horie, although Miyauchi and ex-representative director Fumito Kumagai waffled during testimony regarding the extent to which they though their former boss was guilty.
They have stated Horie was aware of illegal transactions and window-dressing at Livedoor.
Prosecutors in October demanded 2 1/2 years in prison for Horie’s right-hand man, Miyauchi, and 18 months in prison for the other three. They also suggested Friday the executives’ testimony was “trustworthy and of high rationality,” in comparison with Horie’s claims which, they said, “conflict with the evidence,” including e-mail messages between those involved.
Prosecutors sought a relatively lengthy prison term for Horie, arguing that he still has a personal fortune of over 10 billion yen and may start another shady business in the future.
“There is a significant possibility that he will commit similar crimes, next time more ingeniously,” the prosecution claimed, citing Horie’s defiance over the alleged crimes at Livedoor.
Horie, who was released on 300 million yen bail in April, has made repeated media appearances proclaiming his innocence.
Before finding himself in legal hot water, the maverick businessman made waves with an unsuccessful attempt to take over the country’s largest broadcaster, and he made an abortive run for the Diet.
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