Japan’s Livedoor case could take years

Any legal case against executives from Japanese Internet portal operator Livedoor, who were arrested last week on suspicion of violating Japan’s Securities and Exchange Law, could take years to complete, a political commentator said Tuesday.

Livedoor CEO Takafumi Horie, CFO Ryoji Miyauchi and Director Fumito Okamoto were arrested by the Tokyo District Prosecutors’ Office on Jan. 23, a week after prosecutors raided the company’s headquarters in central Tokyo.

Horie and his company had stood against many of the things that people feel are wrong with Japan – particularly the closed and clubby way in which politics and business occurs – and some had looked to him as a person who could change the country. Thus the raids and his arrest surprised many and prompted heavy local media coverage.

“I think probably that this is a case that will go to the Supreme Court, which means you probably won’t have a verdict until 10 years down the line,” said Yasuhiro Tase, a political commentator and writer for the Nihon Keizai Shimbun business newspaper, at the Foreign Correspondents’ Club of Japan on Tuesday.

Few details of the case have been officially released by prosecutors although newspapers have been publishing daily updates with snippets of information that have come largely from unofficial briefings by the prosecutors’ office.

“Through these leaks, the mass media has taken this information and the entire 120 million people in Japan have basically become convinced that what Mr. Horie and what Livedoor did was a crime,” said Tase. He said that people need to remember that no charges have yet to be filed.

“I think the public, through the mass media, has already made up its mind,” said Tase. “These court cases will be many years off in the future. And by that time, everybody will have lost interest. What’s going to happen over the next few months is that society is going to finish bashing Mr. Horie and his colleagues, this company Livedoor will probably be destroyed and the 220,000 shareholders will probably see their investments become worthless paper.”

Following his arrest, Horie stepped down from his position at Livedoor and the company named a new CEO. The company’s new head, Kozo Hiramatsu, said on Japanese television last week that Horie wouldn’t be able to return to Livedoor’s management no matter what the outcome of the current investigation.

Livedoor stock, which was trading at ¥696 ($5.93) per share just before the raids, closed at ¥107 per share on Tuesday.