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Dubious deals using own shares earned Livedoor 8 bil. yen+(Japan Economic Newswire Via Thomson Dialog NewsEdge)TOKYO, March 4_(Kyodo) _ Profit funneled into Livedoor Co. through dubious securities deals involving the group's own shares allegedly reached around 8 billion yen, prosecution sources said Saturday. The finding was obtained during ongoing investigations by the Tokyo District Public Prosecutors Office into illicit mergers and acquisitions using shares of Livedoor and its group firms, which involved more than 10 investment partnerships, and financial and nonfinancial companies both in Japan and abroad, said the sources. With their investigations reaching a final phase, prosecutors are expected to file charges against former Livedoor President Takafumi Horie and four other former and current executives ahead of March 14, when their period of custody is set to expire, in connection with alleged window dressing by Livedoor in 2004. Horie and three of the four others have been already indicted for alleged securities market manipulation involving a subsidiary and its alleged account fraud. Under the market manipulation case, Horie and the others, with the intent of boosting the stock price of the subsidiary, are alleged to have spread false information through the stock market regarding a merger and acquisition deal by the Livedoor group. Regarding the cases of shady mergers and acquisitions, the Livedoor group is suspected of having made gains via sale of group firms' shares by Livedoor-linked investment partnerships, or through overseas accounts. The group specifically acquired a total of six companies in 2003 and 2004 through share swaps. But in fact those takeover targets were under the control of the investment partnerships, and proceeds from the sale of Livedoor group shares are believed to have been transferred back to the parent company later. Livedoor allegedly hid the flow of such money and attempted to give third parties the impression that the money was earned legally by using dummy companies in Switzerland and the British Virgin Islands -- known as a tax haven, securities companies in Japan and Hong Kong, more than three investment firms, and a financial broker, according to the sources. Some companies refused to cooperate with Livedoor, however, said the sources. The president of an investment firm recalls "strange" stock transactions were made using Livedoor-related investment partnerships the firm partially financed. He turned down Livedoor's request to help establish a new partnership. Horie has reportedly denied having committed any wrongdoing during questioning by prosecutors. But he is believed to have approved of securities schemes worked out by former Livedoor Chief Financial Officer Ryoji Miyauchi and others, the sources said. |