Horie files appeal bid

Former Livedoor president fights court decision

By MARK SCHILLING

Horie

Takafumi Horie, onetime prexy of Internet startup Livedoor, has launched an appeal of a lower court decision to send him to prison for 18 months for securities fraud.

Horie, who built Livedoor from a one-man startup to one of the highest fliers on the Tokyo Stock Exchange, pleaded not guilty at his first hearing on Friday at the Tokyo High Court. Horie, who is free after paying bail of 500 million yen ($4.7 million), was not present at the hearing to avoid media "turmoil," his head lawyer, Yasuyuki Takai, told reporters.

Horie was found guilty in March of conspiring with other Livedoor execs to fake profit figures to boost Livedoor's stock price.

Horie pleaded not guilty in September 2006 at the start of the widely covered case -- a rare move in the Japanese justice system, where defendants in white-collar crime cases commonly enter guilty pleas. His 2½-year sentence was also considered unusually harsh, since convicted execs in similar cases usually draw suspended sentences.

After dropping out of Tokyo U, Horie started the company that was to become Livedoor in 1996. Through a strategy of aggressive acquisitions and stock splits Horie built the company into an Internet powerhouse and stock market darling, driving its value into the stratosphere and his own stake to $1 billion by January 2006.

Early in 2005 Horie led a takeover attempt on radio broadcaster Nippon Broadcasting early as a prelim to wresting control of parent company Fuji TV. The attempt failed, but the web bought a 12.7% stake in Livedoor, worth $411 million, in the spring of 2005 as part of a peace pact with Horie. Following Horie's arrest, however, Livedoor's stock price tanked and Fuji took a $322 million loss.

The fall of Horie triggered a massive stock selloff that analysts dubbed the "Livedoor shock," with thousands of small Livedoor investors following their biz guru over the cliff. Livedoor stock was later delisted.