Prosecutor's Office chases 'Japanese Enron' conviction

A former Tokyo prosecutor is understood to be advising the founder of internet company Livedoor, Takafumi Horie, who has been implicated in the scandal that has come to be known as Japan's Enron.

Michio Masaki worked for the Tokyo Prosecutors Office for 12 years and served as a Tokyo district court judge for three years before leaving to join boutique criminal law firm City-Yuwa Partners, which employs 22 partners and 42 associates, in 2004.

It is understood that he is now advising Horie, who has been detained in the Kosuge Detention Centre, near Tokyo, following a raid on Livedoor's office in January. Masaki did not return The Lawyer's calls.

Japan's Securities and Exchange Surveillance Commission has filed criminal charges against Horie and three other executives for alleged violation of the securities exchange law.

Horie and his former colleagues are alleged to have misled the market with an announcement regarding Livedoor's acquisition of a publisher that was already owned by a Livedoor-controlled investment vehicle in order to maintain a high share price for Livedoor.

The Securities and Exchange Surveillance Commission has also alleged that Livedoor Marketing, an advertising subsidiary of Livedoor, altered its accounts to make its third-quarter pre-tax loss appear as a pre-tax profit.

Tokyo's Prosecutors Office believes Livedoor engaged in market manipulation and accounting fraud under the orders of Horie, his chief financial officer, and others at management level.