Usen President to Buy Stake in Livedoor

By MARI YAMAGUCHI Posted 16 March 2006 @ 12:14 pm EET     Print     Reprint     E-Mail     Comments

TOKYO (AP) - Japanese cable broadcaster Usen Corp. said Thursday its president will personally buy Fuji TV's stake in disgraced Internet portal Livedoor Co.

Click to Enlarge Livedoor Co. President Kozo Hiramatsu, center, speaks at a press conference ...

Usen's President Hideyasu Uno will purchase all of Fuji TV's 12.75 percent stake in Livedoor for 9.5 billion yen ($81.2 million), the company said.

Usen, an Internet and cable broadcasting service firm, also said it will join hands with Livedoor for a business tie-up using Livedoor's Internet services and contents. The two companies will form a committee by the end of this month to work out the details of that relationship.

The purchase relieves Fuji TV of a stake that has plummeted more than 90 percent in value since Livedoor was embroiled in an accounting scandal two months ago.

Fuji TV bought its Livedoor shares for 44 billion yen ($376 million) last year to end a two-month takeover battle for control of Nippon Broadcasting System Inc., Fuji TV's parent company.

The Tokyo Stock Exchange has decided to delist Livedoor shares _ which have tumbled 90 percent since the scandal broke two months ago _ on April 14. A group of individual investors in Livedoor has already begun discussing how to seek compensation from the company.

Fuji TV will book a one-time loss of 34.5 billion yen ($295 million) because of Thursday's sale, Kyodo News reported. The purchase will make Uno the second biggest shareholder behind former Livedoor President Takafumi Horie, who is behind held in jail with four other company executives on charges of falsifying financial reports.

Earlier Thursday, the Tokyo District Court rejected a bail request submitted by Horie, along with that of current Livedoor executive Fumito Kumagai, 28, a court spokesman said anonymously, citing court policy.

The court granted bail requests, however, that were filed by three other ex-executives _ Ryoji Miyauchi, Fumito Okamoto and Osanari Nakamura, all 38 _ who had been arrested together with Horie.

Before his arrest in January, Horie, 33, was a celebrity in Japan for a number of high-profile corporate takeover attempts and his brash style.

In a separate development, Horie has reportedly acknowledged to part of the accounting fraud charges against Livedoor, Kyodo said, citing unnamed prosecution sources.

Horie acknowledged having padded Livedoor's sales in 2004 by about 1.58 billion yen, the report said. The money was booked as profit from a false deal with a company that Livedoor was in talks with over a possible buyout, it said.

The prosecutor's office declined to comment on the report as the investigation is ongoing.

Violating securities laws carry a maximum penalty of five years in prison and 5 million yen (US$42,490, euro35,260) in fines.

The Livedoor scandal set off a huge sell-off in the Japanese stock market in mid-January and wreaked havoc with the exchange's computerized trading system.