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Former IT entrepeneur calls Japanese judiciary a ‘hostage system’

'Total Resistance'
“Total Resistance”
TOKYO (TR) – Known for his fondness for t-shirts and shaking up Japan’s business world, Takafumi Horie, founder of Web portal Livedoor, last week resurfaced at a press luncheon where, three years after his arrest for falsifying financial reports, he denounced Japan’s legal system.

“I think the justice system in Japan is a hostage system,” said the 36-year-old dot-com pioneer at The Foreign Correspondents’ Club of Japan. “The public prosecutors are out of control and I think something should be done.”

In March of 2007, he was found guilty of falsely reporting a 300-million-yen loss as a 5-billion-yen gain on the Livedoor books. Last year he lost his appeal on his two-and-a-half-year prison sentence. He subsequently submitted an appeal to the Supreme Court. He is now out on a 600-million-yen bail.

Dressed in a black jacket and jeans, he said he is innocent, citing the reason for the discrepancy as being largely due to complications within an “arcane” accounting system.

He feels he is being treated unfairly considering that other companies involved in similar matters received much more lenient considerations. As as an example, he referenced Nikko Cordial. The securities company was involved in inflating its books for a much greater sum than Livedoor yet it received only a 500-million-yen fine and suffered no arrests or a delisting, as was the case for Horie’s firm.

The public prosecutors are selective, he said, targeting prominent individuals. “If you are famous, achieve some amount of success or make a great deal of money, then you should be aware that there will be people who will be envious,” he said.

Horie sees the current system as dangerous with its lack of third-party checks and balances. The process of indictment, where decisions are made in private — a “black box” in which no one can see from the outside — lacks transparency, he said.

In 2005, the then brash Horie rattled the nation’s corporate world by buying up more than half the shares of radio broadcaster Nippon Broadcasting, a hostile takeover move that removed Fuji TV as its largest shareholder.

Later that year, he signed on for the Hiroshima District No. 6 election to offer a fresh alternative to what is often seen as a hopelessly rigid political system. “I want to change the status quo of the image that politicians have,” he said just prior to the election, which he lost. “I want young people to think that politicians can be cool and brilliant.”

In January of the following year, the offices of Livedoor were raided and Horie arrested. He spent 95 days in detention, a period which he described as something similar to hell.

“Total Resistance,” a book intended to assist future executives and entrepreneurs “navigate the unique idiosyncrasies of doing business in Japan,” was written over three years, much of that time being when he was behind bars. “It took me a very long time for my feelings and emotions to settle so I could write this book,” he said.

Space is his next business venture. He has plans to develop a manned rocket engine within five years.

Though he admits to having been anxious and in a hurry, he has no fundamental regrets regarding his past. “I believe I was doing my best at that time,” he said. “If I were to go back in time I would probably do the same thing again.”