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Ministers Rap Livedoor, Defend LDP Backup of Horie in Election

Posted on: Tuesday, 24 January 2006, 12:00 CST

By Kyodo News International, Tokyo

Jan. 24--TOKYO -- Prime Minister Junichiro Koizumi and his Cabinet members on Tuesday criticized Livedoor Co. for its alleged securities law violations, but defended a Liberal Democratic Party's move to informally support Livedoor President Takafumi Horie when he ran in the general election last year.

"The incident and the fact that senior LDP officials gave some support (to Horie) are separate matters," Koizumi told a House of Councillors meeting Tuesday morning, while expressing his regrets over the ongoing scandal of the Internet service company which further developed with the arrest of Horie the previous day.

Other ministers also expressed similar regrets and defense of the LDP at their respective press conferences.

"This is a very regrettable case in terms of the soundness of the market as it is the violation of the Securities and Exchange Law," Financial Services Minister Kaoru Yosano told a news conference.

"A number of stockholders bought Livedoor's shares. I feel sorry for them," he said.

Finance Minister Sadakazu Tanigaki said in general terms that market players, including investors and companies, are required to act properly so as not to damage the soundness of the market.

Regarding the responsibility of the LDP in the election, Tanigaki said Horie did not receive official support or recommendation from the ruling party.

Economy, Trade and Industry Minister Toshihiro Nikai said the incident is regrettable as it took place as the Japanese economy shows signs of recovery with a pickup in its stock prices.

Nikai said it is also regrettable that the LDP could not have learned earlier of Horie's wrongdoing, though Horie did not run on the LDP ticket in the race. Horie lost the general election.

On the arrest of Horie, Foreign Minister Taro Aso said it is natural to be punished if he has violated laws.

Aso said it would have been difficult for a political party to discover the wrongdoing of Horie, saying the situation is same as for the news media.

Meanwhile, Yosano dismissed calls from some lawmakers of the LDP to make the Securities and Exchange Surveillance Commission independent from the Financial Services Agency.

Some LDP lawmakers have argued that the SESC should be independent from the FSA, like the U.S. Securities and Exchange Commission.

But Yosano said he is not planning to reconfigure the organization in such a way, though he may study the need of increasing workers in the SESC to boost monitoring functions.

The SESC operates as an arm of the FSA, though it is empowered to monitor stock trading and file criminal complaints with public prosecutors.

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Copyright (c) 2006, Kyodo News International, Tokyo

Distributed by Knight Ridder/Tribune Business News.

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Source: Kyodo News International, Tokyo

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