Livedoor Probe and Suicide Shake Japanese Markets

19 January 2006

Japanese share prices are in chaos following revelations that internet company Livedoor is being investigated by Tokyo prosecutors for market manipulation [WAMN: 18-Jan-06].

For the first time in its history the Tokyo Stock Exchange closed early on Tuesday in a bid to head off a meltdown after a frantic day's trading.

The country's Nikkei 225 index closed down 464.77 points, or 2.94%.

Livedoor, one of Japan's best known online businesses, saw its own shares suspended temporarily following a newspaper report that it had falsified its 2004 earnings.

In a statement sent to the stock exchange on Wednesday, the company said: "We will make utmost efforts to investigate the fact and will report as soon as we conclude."

The newspaper report in the Yomiuri Shimbun, citing unnamed people, claimed Livedoor "window-dressed" its accounts by transferring profits from three affiliates to cover a ¥1 billion ($8.6m; €7,1m; £4.9m) deficit.

The company's offices were raided on Monday by prosecutors looking into allegations that it misled investors to boost its share price by announcing last October it intended to acquire a publisher ... despite the fact that it already owned it.

    NEWS FLASH: 07.12 GMT
    Executive Linked to Livedoor is Found Dead

    The murk eneveloping Livedoor thickened Wednesday evening with the discovery of a body in an Okinawan hotel room. According to local police, suicide is suspected.

    The corpse is believed to be that of Hideaki Noguchi, vice president of H S Securities, a company linked to Livedoor and raided earlier this week by Japanese fraud prosecutors. Noguchi is also said to be a former executive of Livedoor's forerunner On the Edge.

    HSS denies any malpractice, as does Livedoor.

    Asserts HSS president Hideo Sawada: "We find [the suicide] regrettable and feel a heartbreaking grief."

Data sourced from multiple sources; additional content by WARC staff