Image: President of H.S. Securities Co. Hideo Sawada.
Toru Yamanaka  /  AFP - Getty Images
President of H.S. Securities Co. Hideo Sawada answers questions during a press conference at the Tokyo Stock Exchange, on Thursday, after the company's vice president Hideaki Noguchi was found dead in an apparent suicide at a hotel in Okinawa.
updated 1/19/2006 10:08:38 AM ET 2006-01-19T15:08:38

The investigation into Internet startup Livedoor Co. that rattled Japan’s stock market this week took a morbid turn when the dead body of an executive linked to the company was found in a suspected suicide.

A body believed to be that of Hideaki Noguchi, 38, vice president of H.S. Securities Co., was found in a hotel in the southern state of Okinawa on Wednesday evening in a suspected suicide, according to local police spokesman Tatsuki Yara.

Noguchi is a former employee of On the Edge, the predecessor of Livedoor, which is at the center of a widening investigation that triggered the so-called “Livedoor shock” — the 6 percent plunge on the Tokyo Stock Exchange on Tuesday and Wednesday.

The market rebounded Thursday as the Nikkei 225 average rose 2.3 percent.

H.S. Securities is among the companies raided this week by prosecutors in connection with possible fraudulent practices by Livedoor. The securities firm confirmed in a statement Thursday that it is under investigation by prosecutors and securities officials.

“We believe there wasn’t anything wrong,” Hideo Sawada, president of H.S. Securities, told a news conference. “We find (Noguchi’s suicide) regrettable and feel a heartbreaking grief.”

The Livedoor scandal broke on Monday when Tokyo prosecutors raided the company’s offices to investigate allegations the company had violated securities laws — spooking investors and driving share prices down.

Livedoor has repeatedly denied any wrongdoing. On Thursday it submitted a statement to the Tokyo Stock Exchange saying it did not break securities laws during a 2004 corporate takeover, as alleged in media reports.

Intense media attention
The investigation has garnered intense media attention partly because of the fame of Livedoor Chief Executive Takafumi Horie, 33, an entrepreneur whose bold takeover attempts and maverick style have earned him both adulation and contempt.

A frequent guest on TV shows and author of books like “How to Make 10 Billion Yen,” Horie also ran unsuccessfully for parliament in September.

Started by Horie in 1997, Livedoor offers various Internet-related services, including consulting, telecommunications, mobile sites and software development.

It has bought up a spate of companies through share swaps and by offering more of its own stock — 27 companies between 2001-2005 — in deals that have drawn particular scrutiny from investigators.

Reports have claimed that Value Click Japan Inc., the predecessor of a Livedoor subsidiary, provided false information during its takeover of Japanese publisher Money Life in 2004.

Livedoor allegedly concealed the fact that it already owned Money Life through an investment fund subsidiary of the Livedoor group, according to the reports.

But the Internet firm denied those claims Thursday, saying the investment fund was not part of Livedoor.

“(Livedoor and the fund) have different operating officers. So we deemed it inappropriate to include the fund in our consolidated earnings report,” the company said in a statement submitted to the Tokyo Stock Exchange on Thursday.

Media reports have also said Livedoor is suspected of concealing a $8.7 million (1 billion yen) loss for full-year results ending September 2004, among other allegations.

The Tokyo Stock Exchange said that Livedoor is in danger of being de-listed from the bourse.

“As long as we get a clear explanation of the allegations (from the authorities), that will be enough for us to make a move,” Taizo Nishimuro, the stock exchange’s president, told reporters Thursday.

Livedoor’s stock, listed on the Mother’s market of emerging companies, closed at $3.61 (416 yen), down from the last quote Wednesday of $4.31 (496 yen). That’s down 40 percent from its Monday close of 696 yen.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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