Things just keep getting worse for Livedoor. On Friday , it got the slammed with the largest fine ever in Japanese corporate history for securities laws violations. (another link) Two certified accountants were also convicted, and one of them got a prison sentence _ the first time an accoutant landed behind bars in Japan on a guilty verdict on such charges. Livedoor was a first for Japan in many ways, and so it makes sense that the justice that the company and its people are getting is also marking a first. About 3,600 individual investors are suing Livedoor and Horie for damages. Harsh judgments in criminal courts are a plus for civil cases. Fuji TV, which was once a major stakeholder in Livedoor, has said repeatedly it’s suing Livedoor for damages. And Livedoor’s new management is now talking about suing Horie.
Miyauchi was not able to avert a prison term and was sentenced to 20 months in prison. The others got suspended sentences.
I did a story on how people are questioning the harsh treatment Horie is getting vs. Nikko Cordial. Another link. And an updated version of the story on the possibly double standard in Japanese justice. Some are even hinting the authorities are getting lenient because Citigroup is interested in taking over Nikko Cordial. Delisting Nikko Cordial would have saved money for Citigroup by making NC shares cheaper. But NC’s reputation would have been devastated. By not delisting, its reputation stays intact and you prevent an exodus of the best workers from Nikko, according to pundits. For the cynics, the message is: It pays to be big and powerful, and maybe American in Japan.
Perhaps the Japanese court will hand down as harsh a verdict on the other executives at Livedoor as with Horie.
Japan’s court system doesn’t have plea-bargaining.
The judge in Horie’s case is saying that the evidence shows Miyauchi was the main man behind the schemes, allegedly used to inflate profits.
Then at least the logic would follow that it would make sense for Miyauchi to possibly end up with even a heavier sentence.
Soichiro Tawara’s news show on TV Asahi noted the lenient treatment Nikko Cordial was getting from the authorities vs. what happened with Livedoor.
Nikko wasn’t even delisted despite lots of Japanese media reports saying that it will _ making its stocks gyrate like mad all along (likely landing hefty profits for investment funds).
The show also pointed out, as have our AP stories on Livedoor, that past executives accused of inflating earnings didn’t get prison terms.
But the pundits on the TV show said part of the reason may be that Horie made millions off selling his stocks in Livedoor.
The verdict on Miyauchi and others is scheduled for March 22.