Brash Japanese Internet entrepreneur arrested on financial fraud charges

Monday, January 23rd 2006, 6:07 am
By: News On 6

TOKYO (AP) _ Japanese authorities on Monday arrested Takafumi Horie, the chief executive of Internet portal Livedoor Co. at the center of a financial fraud probe that has roiled Tokyo's stock market, prosecutors said.

The arrest culminates a weeklong investigation into Livedoor Co. that began with a surprise raid on the company's Tokyo headquarters and 33-year-old Horie's home Monday last week.

Prosecutors have said Livedoor is suspected of violating securities laws by spreading false information about stocks, and Japanese media reports say Livedoor is also suspected of covering up losses.

Japanese prosecutors can hold suspects for as long as three weeks without filing official charges. Horie has repeatedly denied wrongdoing.

``I have no recollection on any of the allegations. And I don't even know how to comment because I have no idea what kind of investigation the media reports are coming from. That's the situation,'' Horie wrote in his blog over the weekend.

Jitters about the probe into Livedoor and Horie, a celebrity in Japan for his bold takeovers and defiant criticism of the stodgy old guard in corporate Japan, sent the Tokyo stock market down again Monday after it tumbled last week.

The benchmark Nikkei 225 index lost 336.04 points, or 2.14 percent, to close at 15,360.65 on Monday, bringing its losses since the start of last week to 6.7 percent.

The Tokyo Stock Exchange placed Livedoor shares under a warning late Friday for not disclosing enough financial details about the recent allegations. The exchange has been considering delisting Livedoor and that move is more likely with the arrest.