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Fund manager admits insider trading

High-profile Japanese fund manager Yoshiaki Murakami bows his head at a press conference at the Tokyo Stock Exchange yesterday. Murakami said he had signed a statement during questioning by prosecutors admitting to violating the securities and exchange law and expected to be arrested shortly. PHOTO: AFP

A well-known Japanese fund manager acknowledged yesterday that he had engaged in insider trading in an unfolding case that is drawing intense attention in a nation where aggressive investment funds are still relatively rare.

"It's my fault, I broke the law," Yoshiaki Murakami, president of MAC Asset Management Pte fund widely known as Murakami Fund, said at a press conference yesterday in Tokyo that was broadcast nationwide. "I have signed an affidavit to that effect."

Murakami said that he may be charged with insider trading, forcing him to cede control of his US$3.6 billion investment fund.

Murakami rose to fame as an outspoken proponent of investor rights and free markets.

But he was widely viewed with suspicion by many among the old-guard business establishment as just being out for money and representing dubious foreign investors, and not interested in proper Japanese management practices.

Murakami denied that he intended to commit a crime when he bought a large number of Nippon Broadcasting System Inc shares with advance knowledge that Internet startup Livedoor Co would make a takeover bid for the radio network.

He said he chanced upon that information and was not fully aware that his actions may constitute insider trading.

Livedoor executives, including former president, Takafumi Horie, are embroiled in a separate criminal case, centered on falsifying is own earnings reports and those of a subsidiary. Horie was arrested earlier this year on charges of violating securities exchange regulations.

Japanese media reports said that Murakami could be arrested later yesterday.

Murakami, a 46-year-old former government bureaucrat, said he had signed a document with Tokyo prosecutors admitting wrongdoing, and he expected to be charged.

He also said he was stepping down as fund manager although his fund will continue to operate.

"I didn't intend to commit a crime," Murakami said. "I made a mistake."

The Murakami Fund bought a large stake in Nippon Broadcasting shortly before Livedoor and Fuji Television Network Inc launched a heated takeover battle for the radio broadcaster.

Livedoor had bought Nippon Broadcasting shares from other investors in off-hours trading last year, raising its stake to 35 percent from about 5.4 percent. The Murakami Fund is believed to have sold part of its stake to Livedoor, reaping hefty gains, media reports say.

The fund has recently been under media scrutiny for accumulating a 47 percent stake in major Japanese railroad company Hanshin Electric Railway Co.

Last week, a rival railroad, Hankyu Holdings Inc, offered to buy out Hanshin, apparently in reaction to fears that Hanshin will get taken over by Murakami. The ruckus over Hanshin illustrates Murakami's negative image among some in Japan's business community and the mainstream media.
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