Executive linked to Livedoor found dead in hotel room

An executive linked to the scandal-hit Livedoor has committed suicide as the investigation into alleged stock-price manipulation by the once high-flying Japanese internet and financial services company deepened.

Japanese police said yesterday Hideaki Noguchi, vice-president of the brokerage HS Securities, cut his wrists in a hotel in the southern holiday resort of Okinawa, a three-hour flight from Tokyo, on Wednesday afternoon. According to hotel staff, Mr Noguchi, 38, had checked in alone Wednesday morning after flying from Tokyo and was found dead on his bed beside a kitchen knife.

A spokesman for HS Securities, which was raided this week by securities watchdog officials investigating Livedoor, said he "could not speculate" whether the death of Mr Noguchi was connected to the investigation. "He co-operated with the investigators all night until Wednesday morning and went home early," said the spokesman, who described himself as "a friend" of the deceased. "He was so exhausted he hardly knew what he was doing. It is a tragedy that such a young man was feeling under such pressure."

The president of HS Securities, Hideo Sawada, described Mr Noguchi's death as "heartbreaking" but denied the firm was guilty of any wrongdoing.

Mr Noguchi was a key executive in Livedoor's predecessor Edge and helped the company go public before taking over the running of an affiliate. In 2002, he joined HS Securities, which manages an investment fund under scrutiny by investigators. A source linked to Livedoor said Mr Noguchi had still been close to the company and had been "a friend" of its flamboyant president, Takafumi Horie.

News of the suicide failed to dent a rally in the Nikkei, which closed up 355 points at 15,696.3. And it came as more details emerged of window dressing and manipulation among Livedoor's 40 or so subsidiaries.

Prosecutors allege that in October 2004, Livedoor's affiliate, Livedoor Marketing (then known as Value Click Japan), failed to declare its parent's interest in a publishing firm it was about to acquire. The publishing firm, later sold to a foreign investor, was allegedly bought using Livedoor funds in an apparent attempt to inflate the share price of Value Click.

Several media outlets also said Livedoor had shifted funds around its subsidiaries in early 2004 to try to conceal a ¥1bn (£5m) deficit. Mr Horie, who gave a brief, tetchy press conference this week, has so far not commented on the new allegations.

Meanwhile, the Japanese media spent yesterday raking over the embers of Wednesday's near meltdown in the Tokyo Stock Exchange, sparked when investors began dumping Livedoor shares. Many television bulletins blamed the exchange's computer system for the crisis.

The exchange pulled the plug on trading 20 minutes early on Wednesday as it neared its limit of 4.5 million trades. Several commentators said the New York Stock Exchange deals with 4.8 million orders a day without incident. New York and London split operations among a number of computer systems in contrast to Tokyo's single system.

Ayumu Sato, a manager with the net securities firm Matsui Securities, which was flooded with calls from worried investors yesterday, said investors were "confused and bewildered" by the stock market chaos.