Prosecutors raid Japanese Internet company Livedoor

Monday, January 16th 2006, 9:52 am
By: News On 6

TOKYO (AP) _ Prosecutors on Monday raided Japanese Internet company Livedoor Co., whose outspoken chief executive had grown into a star here for trying to buy media conglomerates and running in nationwide elections.

About 20 officials walked into Livedoor headquarters in Tokyo Monday evening. Livedoor is suspected of violating securities laws in spreading false information, the Tokyo prosecutors' office said in a statement while refusing to give details on a pending case.

Fuji TV reported Livedoor is suspected of giving false information about a subsidiary in an alleged effort to improperly boost stock prices.

Livedoor officials did not immediately answer requests for comment. Prior to the raid, company spokeswoman Ayako Otobe denied reports about any wrongdoing or an investigation.

Takafumi Horie, Livedoor's president and chief executive, is a big celebrity in Japan, often appearing on TV shows.

He has been heralded as a hero by some for his success in starting up Livedoor in 1997 and for challenging Japan's stodgy business elite with his bold buy-out attempts, while being criticized in more established circles for his brash and defiant ways, including favoring T-shirts over suits and ties.

Horie, 33, nicknamed ``Horiemon'' by the Japanese public in a reference to the pudgy cartoon character Doraemon, has made a fortune buying up various companies and has written books on how to make money in the Internet business.

Livedoor offers various Internet services, including consulting, telecommunications, mobile sites and software development. But the company has also bought up chunks of other companies and managed to raise money by offering more of its own stock, which has surged in recent years.

A dropout of the prestigious University of Tokyo, Horie shot to fame with the Japanese public in 2004 when he tried but failed to buy an ailing professional baseball team.

He also made an unsuccessful hostile takeover bid for Fuji Television Network Inc. and ran in parliamentary elections last year as an independent supported by the ruling Liberal Democratic Party but did not get elected.

Such failures, however, have merely drawn more attention to Horie and his company. He has recently been appearing in quiz and travel shows and a TV ad for Livedoor, and he also runs one of the most widely read blogs in Japan.

Last year, Horie called for more clarity in Japanese stock trading regulations, especially acquisitions, including those by foreign investors.

``The Japanese stock market is like a lamb or rabbit in a pack of wolves. It is very dangerous,'' Horie said at that time at the Foreign Correspondents' Club of Japan in Tokyo. ``Unless someone acts, things don't get corrected.''

Japanese media reports said other locations related to Livedoor such as other offices and Horie's home were also searched.