Apparent Suicide In Japanese Scandal
An executive of a securities firm allegedly involved in corporate takeover deals by Internet startup Livedoor Co. was found dead in an apparent suicide, police said Thursday. Livedoor again denied any financial misdeeds.
A body believed to be Hideaki Noguchi, vice president of H.S. Securities Co., was found in a hotel in Okinawa Wednesday evening, according to local police spokesman Tatsuki Yara.
Police suspect that Noguchi, 38, committed suicide, Yara said.
Noguchi is a former employee of On the Edge, the predecessor of Livedoor, which is at the center of a widening investigation that triggered massive selloffs on the Tokyo Stock Exchange on Tuesday and Wednesday. The market recovered some Thursday.
H.S. Securities is among the companies raided this week by prosecutors in connection with fraudulent practices by Livedoor. The company confirmed in a statement Thursday that it is under investigation by prosecutors and securities watchdog officials.
Investors and the Japanese public alike were stunned when prosecutors marched into the Tokyo headquarters of Livedoor Monday evening on suspicion of violation of securities laws by giving false information.
Livedoor is facing a widening criminal investigation that sparked a massive sell-off in Japan's stocks market Tuesday and Wednesday. Stocks recovered some ground in Thursday's trading, as the Nikkei 225 index gained 355.10 points, or 2.31 percent, to 15,696.28 points.
The afternoon session started 30 minutes later than normal as a precaution to avoid a repeat of Wednesday, when a flood of sell orders prompted the Tokyo Stock Exchange to close trading 20 minutes early - the first time Asia's biggest bourse has shut down trading for capacity reasons.
Livedoor has repeatedly denied any wrongdoing. On Thursday it submitted a statement to the Tokyo Stock Exchange saying it did not break securities laws during a 2004 corporate takeover, as alleged in media reports.
Reports have claimed that Value Click Japan Inc., the predecessor of a Livedoor subsidiary, provided false information during its takeover of Japanese publisher Money Life in 2004.
Livedoor allegedly concealed the fact that it already owned Money Life through an investment fund subsidiary of the Livedoor group, according to the reports.
But Livedoor denied those claims Thursday, saying the investment fund was not part of Livedoor. The company currently has 44 subsidiaries, many of which it took over, Livedoor spokesman Kazuyoshi Omura said.
"(Livedoor and the fund) have different operating officers. So we deemed it inappropriate to include the fund in our consolidated earnings report," Livedoor said in a statement Thursday to the Tokyo Stock Exchange.
Still, the Internet company may be delisted from the bourse if it is found to be in violation of securities laws, bourse official Mitsuo Miwa said. The exchange has asked Livedoor for more information, and a formal decision will come later, Miwa said.
"It's a big well-known Internet company. It was one of the high-flyers that people thought was doing really well, and it turns out it may have been playing with the books, much like Enron," reports CBS News correspondent Barry Petersen.
Livedoor is headed by 33-year-old Takafumi Horie, who founded Livedoor and 1997 and rose to celebrity status as a geeky entrepreneur — a rarity in Japan. He has made unsuccessful attempts to buy the Fuji Television media conglomerate and the Osaka Buffaloes baseball team, frequently appears on TV and runs a widely-read blog.
Horie denies any wrongdoing.
Media reports have also said Livedoor is suspected of concealing a 1 billion yen ($8.7 million) loss for full-year results ending September 2004, among other allegations.
Livedoor offers a wide range of Internet-related services, including consulting, telecommunications, mobile sites and software development.
It also has bought chunks of other companies and raised capital by offering more of its own stock - an area that has drawn particular scrutiny from investigators.