Takafumi Horie, the former CEO of Internet firm Livedoor Co. who came to symbolize a freewheeling capitalism that challenged with Japan’s cozy corporate norms, pleaded not guilty on Monday to charges of breaking securities laws.
In what came to be called the “Livedoor Shock, a January raid on Livedoor sent Tokyo share prices tumbling, halting trade and rattling confidence in the world’s second-largest bourse.
The case embarrassed Prime Minister Junichiro Koizumi, who had tapped the T-shirt wearing high-flying IT executive to run for parliament.
Prosecutors have said they believed Horie and four other company executives had sought to boost share prices by spreading false information, issuing new shares to “acquire” firms already under Livedoor’s control and then selling them for a profit to pad its books.
“I have not carried out, or instructed, such crimes as were mentioned,” Horie said at the start of the trial. “It’s regrettable that I’ve been indicted.”
Horie faces up to five years in prison and fines of up to 5 million yen ($43,000) if found guilty. Japanese media have said a verdict in the case may not come for five months or more.
Horie also faces damages suits from former shareholders after Livedoor brought in new management and was forced to delist following his detention.
Horie entered the courthouse wearing a suit and open-necked white shirt, but donned a blue tie before the trial began, which Japanese media seized upon as a sign he was taking it seriously.
Eager spectators
In a reflection of intense public interest in the case, some 2,000 people lined up—some from around dawn—in hopes of getting one of 61 courtroom seats available for the public, media reports said.
Most TV stations broadcast live from in front of the court, with some providing breathless, blow-by-blow updates.
Nicknamed “Horiemon” for his resemblance to Doraemon, an popular rotund cartoon cat, the tycoon was once touted as a symbol of a new, more dynamic Japan where hostile corporate takeovers were the norm and wealth was for flaunting.
A dropout from the elite University of Tokyo, he set up Livedoor’s predecessor, Livin’ On the Edge, a decade ago with a mere $50,000 in capital and turned it into a sprawling Internet conglomerate with market capital of more than $6 billion.
Horie’s attempt to buy a baseball team in 2004 and a rare takeover battle with a giant media group last year won him many admirers among young people, but also made him enemies among Japan’s conservative business elite.