Livedoor Denies Allegations About Group Firm’s Conduct
By Kyodo News International, Tokyo
Jan. 19–TOKYO — Livedoor Co. said Thursday that it has found no wrongdoing during its internal investigation into ongoing allegations about its group firm’s conduct in connection with a 2004 takeover of a publisher.
Livedoor released a statement shortly before the market opened for the day, saying the group firm, ValueClick Japan Inc., which now is called Livedoor Marketing Co., did not need to announce the fact that shares of the publisher, Money Life, had been held by an investment fund when it announced the takeover of the publisher on Oct. 25, 2004.
The investment fund was not directly related with the Livedoor group, the Internet services firm said, disputing the charge that ValueClick had failed to report about the fact.
Prosecutors raided Livedoor’s head office and its President Takafumi Horie’s home Monday on suspicion of securities law violations in connection with the ValueClick’s buyout of Money Life.
Citing mostly sources close to the investigation, Tokyo media have since reported that Money Life shares had already been effectively held by the Livedoor group at the time of the announcement, because the investment fund was financed by Livedoor.
In the statement, Livedoor also defended ValueClick’s stock split in November 2004. It has been alleged that this move was aimed at lifting its stock price so as to take advantage of the higher price in the takeover of Money Life. The takeover was to be done through a stock swap.
The timing of the stock swap for the takeover was postponed to the day when its stock split was to take effect so as to avoid a period when the stock split would affect prices, Livedoor said.
A stock split tends to boost the price of the concerned stock for a while as it takes about 50 days before the process is completed, and during that period demand for the stock tends to increase.
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