Massive fine for Japan's Livedoor

A Japanese court has handed down the largest fine in Japanese history to Livedoor Co, the Japanese internet company, for violating securities laws.

Massive fine for Japan's Livedoor

A Japanese court has handed down the largest fine inJapanese history to Livedoor Co, the Japanese internet company, for violatingsecurities laws.

 

Tokyo District Court on Friday fined Livedoor 280m yen($2.4m) and Livedoor Marketing, a subsidiary, 40m yen ($338,000), as twofurther company executives were sentenced to jail terms.

 

In announcing the fine, the court said that the crime atLivedoor was "systematic" in its attempts to mislead individualinvestors, and that it had failed to live to up to its responsibility as alisted company.

 

 

The record fine against Livedoor surpassed the 200m yen($1.7m) penalty imposed in 2005 on Seibu Railway for falsifying financialstatements, according to the government's Financial Services Agency.

In a separate session earlier on Friday, Taishin Hisano, anaccountant at Livedoor, was sentenced to 10 months in prison, while MotoshiKobayashi, his supervisor, received one year in prison suspended for fouryears, a court official said.

Japan'sKyodo news agency reported that it was the first time in Japan that acertified accountant had received a prison term in a court case involvingsecurities laws violations. Both accountants pleaded not guilty.

Seven convicted

The latest convictions bring the number of people convictedin the Livedoor case to seven, beginning with Takafumi Horie, the former chiefexecutive, who was sentenced to two and half years in prison last Friday.

The tough fines and prison terms given to those at thecenter of the scandal come as part of a growing effort to crack down oncompanies testing what are still grey areas in regulation on stock trading in Japan.

In the past, executives charged with tampering with earningsreports, even at companies bigger than Livedoor, had generally avoided prisonterms and got suspended sentences.

'Dummy' entries

On Thursday four former Livedoor executives were foundguilty of securities laws violations with three of the former officials beinggiven suspended sentences and Ryoji Miyauchi, Livedoor's former chief financialofficer, sentenced to 20 months in prison.

The executives are accused of setting up a number of fundsthat prosecutors alleged were "dummy" entities to do stock swaps andother stock trading.

Prosecutors said the complex set of schemes fabricated 5bnyen ($42.5m) in profit.

The Livedoor scandal broke in January 2006, when prosecutorsarrested Horie and other top executives, triggering a sell-off on the Tokyo stock market andprompting calls for clearer laws about stock trading.

Livedoor was delisted from a Tokyo exchange for startups but has beentrying to rebuild its business under new management.

Source:Agencies

Güncelleme Tarihi: 20 Eylül 2018, 18:16
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