Falsified earnings and inflated stock values may have led Livedoor down the path of destruction with affiliates breaking off all ties, but now the Tokyo Stock Exchange (TSE) seems to bent on de-listing the internet company's shares.
Following the arrest of the company's CEO, CFO and Director for the securities violations, the TSE has taken over supervision of trading of shares of Livedoor and its marketing subsidiary.
With stock exchange's announcement coming soon after the arrests, it appears that the move is a precursor to de-listing. A week earlier Livedoor's head quarters and key offices of its affiliates were raided by investigators from the District Prosecutors' Office. Though the charges have not been detailed, media reports have suggested that the violations pertain to recent acquisitions and splitting and swapping of stocks.
Once the poster-boy of new era entrepreneurship in Japan, 33-year old Livedoor chief Takafumi Hori was a very public figure prominent for his bold attempts to buyout companies and iconoclastic ways. A T-shirt sporting college dropout, he appeared to embody the emerging face of Japan's business leadership and yet was someone who would try his hand at politics. He sported his love for the good life openly against a backdrop of a society that saw such flamboyance as unbecoming.
But the problems started after Tokyo District Public Prosecutors Office delved into a possibility of the Livedoor falsifying its financials in 2004 by boosting its earnings to the tune of billions of yen. Though Horie is understood to have denied the charges, ex-director Ryoji Miyauchi and other key executives have accepted them as true. On questioning Miyauchi is believed to have said that Horie had been in the know about the cooked up earnings.
The company that had a veritable presence in the stock market and inspired buyers with its innovative services has plunged almost 90 percent from its January market values. In just a week the stock has been eroded to almost junk, with investors panicking and shelving positions they had held when the investigations started. In fact the mayhem reached a point that the Tokyo Stock Exchange had to suspend all trades for 20 minutes last Wednesday to avert a systems crash.
Despite all attempts by the company to convey a business-as-usual image, it appears that the scandal has run out of control even leaving the Japanese Prime Minister Junichiro Koizumi embarrassed. Horie once the favorite of the ruling Liberal Democratic Party it appears was just another ambitious materialist exploiting every loophole possible to get where he was.
