Accountant Emerges in Probe Over Livedoor's Alleged Book-Cooking
Posted on: Friday, 20 January 2006, 12:00 CST
By Kyodo News International, Tokyo
Jan. 20--TOKYO -- Prosecutors investigating alleged securities law violations by the Livedoor Co. group have learnt that a chartered accountant who audited the Internet services company's accounting is a representative executive of a consultant firm affiliated with the company, investigative sources said Friday.
While Livedoor is alleged to have committed accounting fraud, the investigators are probing a possible cooperation between the company and the accountant in falsifying financial reports, the sources said.
Auditing firm Koyo & Co., which the auditor used to belong to, only said, "We have nothing to say for the time being." The prosecutors earlier this week raided the Yokohama-based accounting firm along with the Livedoor headquarters in Tokyo and other locations.
Koyo, established in 1998 under a different name, checked and guided the listing of Livedoor's predecessor On the Edge in 2000 and its accounting afterward.
It is now in charge of auditing Livedoor and its group companies including Livedoor Marketing Co., the advertisement subsidiary at the center of investigation.
The prosecutors are investigating whether the fast-growing Internet services group misled the stock market in connection with one of its many merger-and-acquisition deals in order to boost the subsidiary's share price.
The accountant in question audited Livedoor's final account in the year through September 2003 and then left a written comment that the company's "financial statement is appropriate," according to the sources.
Together with the accountant, Livedoor Chief Financial Officer Ryoji Miyauchi holds a representative executive post of consulting firm General Consulting Firm Co., also based in Yokohama.
Livedoor is suspected of falsifying its financial report for the year through September 2004 to make it appear that it had a profit of 2.4 billion yen when it was in fact in the red, the sources said.
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Source: Kyodo News International, Tokyo
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