Shareholders won damages Thursday from Takafumi Horie, founder of Internet startup Livedoor Co., in a class-action suit that claimed people had been duped into making dubious investments in the company.
The court awarded damages totaling ¥7.6 billion, Kyodo News reported. The suit was filed by 3,340 individual and corporate shareholders demanding ¥23 billion.
Horie, 36, an Internet startup star before his 2006 arrest, was later found guilty of securities laws violations. The Tokyo District Court sentenced him to 2 1/2 years in prison, a relatively harsh ruling for white collar crime, in 2007.
The Tokyo High Court upheld that decision last year. Horie has repeatedly said he is innocent and is appealing to the Supreme Court while out on bail.
The lawsuit from shareholders is separate from the criminal case. The lawsuit says shareholders racked up massive losses when Livedoor stock plunged.
Livedoor, which had attracted an unusually large number of individual investors because of Horie’s high profile, was delisted in 2006 after a raid on Livedoor’s Tokyo office sent the stock into a nose dive.
Horie and former colleagues have been convicted of using stock swaps and other dubious maneuvers to pad Livedoor’s books and inflate its share price. Horie has said he did not know about the decisions that his executives made.
“If you are not only famous but also make a lot of money, you need to be aware of the fact that there will be people around you who are going to be envious,” Horie told reporters last month. “They may eventually go to the public prosecutors’ office and give them information that will lead to your downfall.”
By law, investors can file damages lawsuits if a company or its executives are found guilty of giving false information about the company and its businesses.
In his heyday, Horie tried to buy a professional baseball team and take over a radio broadcaster to gain influence over media group Fuji Television Network Inc. He also ran for a Diet seat.
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