Livedoor CFO gets 20-month prison term

TOKYO – A Japanese court handed out its second jail term in the Livedoor accounting fraud yesterday, sentencing the Internet firm’s former finance director, Ryoji Miyauchi, to 20 months in prison.

The penalty follows the two-year sentence given to Livedoor’s flamboyant founder and former chief executive, Takafumi Horie, who has denied knowledge of wrongdoing at the company and is appealing the verdict. Miyauchi and three other executives had admitted guilt and testified against their former boss.The others received suspended sentences yesterday.The jail terms for Horie and Miyauchi contrasted with past penalties meted out to Japanese executives convicted of white-collar crimes, who often receive suspended sentences after pleading guilty and showing remorse.”In Miyauchi’s case, the court had no choice but to impose a jail term given the importance of his role and the enormity of the result,” said the Tokyo District Court’s presiding judge, Toshiyuki Kosaka.Livedoor lost more than US$5 billion in market value following the scandal, which rattled the broader Tokyo market and embarrassed top politicians who had lauded its celebrity CEO Horie, 34, as the symbol of a dynamic new generation of entrepreneurs.Miyauchi, a 39-year-old tax accountant, had admitted engineering schemes to inflate Livedoor’s earnings, including booking phoney orders from allied firms and claiming non-operating gains from sales of company shares as profit.The case has drawn intense media attention in Japan, where Horie rattled conservatives with his money-flaunting lifestyle and brash takeover bids.After unsuccessful attempts to buy a baseball team and a larger media conglomerate, Horie ran for parliament in 2005 with the support of then-Prime Minister Junichiro Koizumi, though he failed to win a seat.Despite Horie’s outsized persona, his defence team had portrayed him as a meek chief executive who relied so heavily on Miyauchi and other financial advisers that they came to dominate his company.The court gave suspended 18-month jail sentences to Osanari Nakamura, the former head of Livedoor Finance Co., and former Livedoor Marketing Co.President Fumito Okamoto.Former Livedoor Director Fumito Kumagai received a one-year suspended sentence.Nampa-ReutersMiyauchi and three other executives had admitted guilt and testified against their former boss.The others received suspended sentences yesterday.The jail terms for Horie and Miyauchi contrasted with past penalties meted out to Japanese executives convicted of white-collar crimes, who often receive suspended sentences after pleading guilty and showing remorse.”In Miyauchi’s case, the court had no choice but to impose a jail term given the importance of his role and the enormity of the result,” said the Tokyo District Court’s presiding judge, Toshiyuki Kosaka.Livedoor lost more than US$5 billion in market value following the scandal, which rattled the broader Tokyo market and embarrassed top politicians who had lauded its celebrity CEO Horie, 34, as the symbol of a dynamic new generation of entrepreneurs.Miyauchi, a 39-year-old tax accountant, had admitted engineering schemes to inflate Livedoor’s earnings, including booking phoney orders from allied firms and claiming non-operating gains from sales of company shares as profit.The case has drawn intense media attention in Japan, where Horie rattled conservatives with his money-flaunting lifestyle and brash takeover bids.After unsuccessful attempts to buy a baseball team and a larger media conglomerate, Horie ran for parliament in 2005 with the support of then-Prime Minister Junichiro Koizumi, though he failed to win a seat.Despite Horie’s outsized persona, his defence team had portrayed him as a meek chief executive who relied so heavily on Miyauchi and other financial advisers that they came to dominate his company.The court gave suspended 18-month jail sentences to Osanari Nakamura, the former head of Livedoor Finance Co., and former Livedoor Marketing Co.President Fumito Okamoto.Former Livedoor Director Fumito Kumagai received a one-year suspended sentence.Nampa-Reuters