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Takafumi Horie: Web mogul and Japanese pariah

Former dot-com star Takafumi Horie speaks to reporters on Dec. 20 last year. PHOTO: AP

Few have risen and fallen as spectacularly as Takafumi Horie, 34, the self-made Internet billionaire now on trial in Japan's courts of justice and public opinion.

At age 31, he became famous overnight for trying to wrest a baseball team from a league controlled by some of Japan's most powerful businesspeople, or, in his words, "the club of old men."

He turned his start-up, Livedoor, into a household name and built it with the kind of aggressive moves unseen in Japan. A swooning media crowned the spiky-haired, T-shirt-clad, trash-talking upstart as the living challenge to Japan's ossified establishment.

For 18 short months, Horie defied gravity. Then early last year, the offices of Livedoor, which had built an eclectic social network site, were raided, and he was arrested on charges of securities fraud; depending on one's view of Horie, the charges amounted to just deserts or political payback.

Television networks showed his enemies gloating about his downfall, reinforcing the impression that the establishment, or some part of it, had decided to destroy Horie. He was transformed into the symbol of all that was bad about the new Japan and its supposed embrace of a ruthless, American-style capitalism.

Denounced and demonized, Horie has yet to be silenced. In a country where defendants face enormous pressure to plead guilty and criminal cases almost always result in convictions, he has fiercely proclaimed his innocence.

And though his trial has yet to end, Horie has taken the extremely unusual step of speaking out to the media, leaving nothing unsaid.

"I'm being made into a bad guy through endless leaks from the prosecution to the media," he said. "So when something's wrong, I have to state that it's wrong. Otherwise, they'll set people's image of me, and that's not good."

At the Tokyo District Court, prosecutors have demanded a four-year prison term for Horie, whom they accuse of having masterminded accounting frauds totaling more than US$40 million and other securities violations at his company.

Driven by greed, lacking a law-abiding spirit, Horie had shown no remorse and still presents a menace to society, they said.

"Isn't it a fact that you raised the value of Livedoor shares, sold them and used the profits to pursue your personal interests and desires?" one prosecutor asked early in the hearing.

"You have a twisted mind. You should repent," Horie replied.

He said Livedoor's accounting practices were on the level. He has acknowledged misreporting the source of about US$10 million, but blamed Ryoji Miyauchi, now 39, the chief financial officer.

Miyauchi, who has pleaded guilty to similar charges against him, said in court that Horie was aware of the wrongdoing. But Miyauchi wavered on this point under cross-examination.

Horie said he was caught in the cross hairs of a Japanese establishment of elite bureaucrats -- who he said do not want ordinary Japanese "to think too much" -- and powerful business executive who fear the changes he represents.

The infractions with which he is charged "are not something that typically merit a raid and arrest," he said.

Indeed, by any standard, Horie has been treated very severely by the authorities. In Japan, companies have long engaged in financial window-dressing, often in collusion with accounting firms, though regulators have cracked down on this practice in recent years.
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