Japanese internet giant Livedoor is at the centre of a probe into allegations that it misled shareholders.
The Tokyo-headquartered firm was raided Monday by prosecutors who are investigating - together with the nation's Securities and Exchange Surveillance Commission - claims that Livedoor spread false information related to shares in a subsidiary.
It is alleged that in an effort to boost its share price, Livedoor announced last October it intended to acquire a publisher ... despite the fact that it already owned the company.
Livedoor's founder and ceo Takafumi Horie has announced his own investigation into the allegations, while the company's finance chief Ryoji Miyauchi says this will show "we have not done anything illegal".
Adds Horie: "We are cooperating with prosecutors in their investigation. We are continuing our efforts to expand our operations and conduct business as normal."
The crisis has spilled over to the Nikkei, which saw the market fall 2.8% on Tuesday, its biggest one day drop since last April.
Livedoor offers various internet services, including consulting, telecoms, mobile sites and software development.
The maverick Horie is a celebrity in Japan for his iconoclastic style, bold buyout attempts and frequent TV appearances. Last year he muscled his way into broadcaster Fuji Television Network with whom he succeeded in forming a strategic alliance [WAMN: 19-Apr-06].
Data sourced from BBC Online; additional content by WARC staff