Livedoor's founder Horie is charged with fraud

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The Independent Online

The descent from grace of Takafumi Horie, Japan's most infamous business mogul, hit another level yesterday when prosecutors charged him with fraud.

As the founder of Livedoor, a powerhouse internet outfit that Japan's youth took to their hearts, Mr Horie became a huge celebrity. But he appalled Japan's traditional business community with his outspoken views and ostentatious displays of wealth.

Mr Horie and three other executives were accused yesterday of spreading false information and falsifying accounts. Tokyo prosecutors said in a statement: "We will make it clear in court that Livedoor achieved rapid growth through criminal acts that threaten the fairness of securities trading. The latest move is just one aspect of this case and we will continue our thorough investigation."

The indictment says Livedoor inflated its shares by using unusual stock splits and releasing false information about profits.

Mr Horie, 33, shook up Japanese culture like few before him. A college drop-out with a sloppy dress sense, he first came to prominence with a start-up business called Livin' On the Edge 10 years ago.

He was seen as close to Japan's Prime Minister, Junichiro Koizumi, and recently failed in a bid for political office, which had been backed by Mr Koizumi.

Mr Horie has been in prison since his arrest on 16 January in a police raid on Livedoor. Since then, its shares have fallen 90 per cent. Kozo Hiramatsu, the president of Livedoor, said he found the charges "extremely regrettable".

Some commentators see the case as a battle between generations. Jesper Koll, the chief economist at Merrill Lynch in Tokyo, said: "It's all about imposing Confucian morals and telling the younger generation they did something wrong. It's a morality lesson for their children."

Mr Horie faces five years in prison if found guilty.