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Fri, Oct 20, 2006 - Page 10 News List

Prosecutors want former Livedoor CFO sent to prison

AFP , TOKYO

Japanese prosecutors yesterday demanded a two-and-a-half year prison sentence for a former top executive at Livedoor Co for his alleged role in a scandal that rocked the once high-flying firm.

They said Ryoji Miyauchi, 39, who as chief financial officer was the right-hand man of disgraced Livedoor founder Takafumi Horie, 33, bore heavy responsibility for the firm's alleged falsification of financial documents.

Prosecutors also requested an 18-month jail sentence for former representative director Fumito Kumagai, 28, and two other senior company officials for alleged violation of the securities law.

"The crime was an extremely vicious one of making profits by betraying investors' trust," one prosecutor told the hearing at the Tokyo District Court, as quoted by Jiji Press.

"It requires a strict punishment to serve as a warning and to prevent the recurrence of similar cases," the prosecutor said.

Horie, who has pleaded not guilty, and his former associates are accused of falsely reporting a ?5.03 billion (US$42.3 million) pretax profit for the year to September 2004 to conceal actual losses.

Miyauchi, 39, has mostly admitted to the allegations and last month testified against Horie, accusing him of falsifying financial figures.

The Livedoor scandal briefly sent the Tokyo Stock Exchange into freefall in January, forcing it to close early for the first time ever and prompting the Japanese authorities to move swiftly to tighten up financial regulations.

Horie sent waves through Japanese boardrooms with his brash business tactics and was seen by the public as a poster boy for a bright new Internet era, but he has since seen a brutal fall from grace and is no longer a face on the celebrity circuit.

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