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Japanese web pioneer faces jail

Graeme Wearden ZDNet.co.uk

Published: 22 Dec 2006 11:39 GMT

One of Japan's web entrepreneurs should be jailed for several years for his part in a multi-million pound fraud, prosecutors claimed this week.

Takafumi Horie, who founded internet giant Livedoor, is standing trial in Toyko for alleged securities fraud. He is accused of falsifying Livedoor's financial results to inflate its profits and thus drive its share price higher.

On Friday, prosecutors demanded that, if found guilty, Horie should be sentenced to four years' imprisonment.

The prosecution case is that Livedoor executives had created "dummy" companies to hide Livedoor's losses, falsely inflated the firm's earnings, and circulated false information. Horie denies all the charges against him.

Horie created his company, initially called Livin' on the Edge, in 1995. Later renamed Livedoor, it grew to be valued at around $6bn (£3.05bn).

The arrest of Horie and other senior executives in January 2006 caused massive panic in Japan, where trading on the stock market had to be halted due to the number of traders attempting to sell shares in the company.

Speaking to the Associated Press this week, Horie said that he is looking to build a new business for consumer space travel.