July 25, 2008

Prison Term Upheld for Japan Internet Tycoon Horie

Tokyo, July 25 (Jiji Press)--Tokyo High Court on Friday upheld a lower court ruling that sentenced former Livedoor Co. President Takafumi Horie, the disgraced Internet tycoon who defiantly challenged Japan's business establishment, to 30 months in prison for securities law violations.

The high court found the 35-year-old entrepreneur who founded Livedoor guilty of conspiring with other former Livedoor executives to submit a false financial statement for the year that ended in September 2004 and to spread false information in order to boost the share price of a group firm.

Presiding Judge Tetsuji Nagaoka said that the fraudulent accounting practice and the release of false information were intentional and done in collusion with the accomplices.

Horie immediately filed an appeal against the high court ruling. He did not appear in court, since he has no obligation to do so.

At issue in the high court was whether Horie intended to conduct the illegal acts and whether the lower court sentence without suspension, issued in March 2007, was appropriate.

According to the latest ruling, Livedoor falsely booked as sales profit from the sale of its own shares via an investment association. Nagaoka said the association was formed for the purpose of law evasion.

Testimony from Ryoji Miyauchi, the Livedoor group's No. 2 executive, and others seemed highly trustworthy because it included comments that were specific and not in their own interest, Nagaoka said.

The judge said Horie played the key role, as the series of crimes would not have been committed without his instructions and agreement as the top executive. He also criticized Horie for lacking respect for social norms.

Nagaoka noted that through the inflated financial statement Horie pursued corporate profit by giving the impression that his company was promising.

Referring to damages to shareholders, Nagaoka said Horie impeded the healthy development of stock investment and had a serious adverse impact in terms of investor protection.END

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