Livedoor Fined 280 M. Yen for Accounting Manipulation

Tokyo, March 23 (Jiji Press)–Tokyo District Court on Friday fined Internet services company Livedoor Co. 280 million yen for manipulating the book in 2004 in violation of Japan’s securities law.

Group firm Livedoor Marketing Co., now called Media Innovation Co., was fined 40 million yen. Prosecutors had requested fines worth 300 million yen for Livedoor and 50 million yen for Livedoor Marketing.

Ahead of the ruling, the same court found two certified public accountants guilty of their involvement in the illegal accounting practice.

Taishin Hisano, 42, who was chief outside auditor for Livedoor at that time, was sentenced to 10 months in prison. The other accountant, Motoshi Kobayashi, 52, received a one-year sentence, suspended for four years.

The court said Livedoor reported a recurring profit in its financial statement for the year that ended in September 2004 even though it actually incurred a loss.

The two accountants approved the statement even though they recognized that Livedoor’s profit was inflated through questionable measures such as fictitious deals.

Over the accounting manipulation and related misdeeds, group founder and former Livedoor President Takafumi Horie was found guilty last week and sentenced to 30 months in prison. The flamboyant 34-year-old entrepreneur insisted on his innocence and appealed the ruling.

On Thursday, Ryoji Miyauchi, the group’s No. 2 executive who served as a key witness for the prosecution in the trial of his former boss, Horie, was sentenced to a 20-month prison term over the same irregularities. Miyauchi, 39, pleaded guilty but appealed the verdict.END

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