The Establishment Strikes Back

It seems that Horie Takafumi will have a little more burdening his mind tonight than what T-shirt to wear to dinner.

Japan's Livedoor raided by prosecutors
Reuters

Mon Jan 16, 2006 5:09 AM ET - TOKYO, Jan 16 (Reuters) - Japanese prosecutors raided the offices of Internet firm Livedoor Co. on Monday in what media described as a probe of the firm and its maverick 33-year-old president over securities law violations.

The prosecutors are also searching his home.

Now it is hard to imagine what written rules Horie could have broken, aside from good taste and possibly personal hygiene--but oh, the unwritten rules he has violated!

While I think he's a scoundrel, this looks like a setup.

The 64 million yen question is whether or not the people (or their unelected representatives, the commentators appearing on the private network news broadcasts tonight and tomorrow morning) rise to his defense .

If they do, will the prosecutors back off?

Later: OK, so now I have seen the 9:00 NHK news.

The Livedoor offices were raided by twelve members of the staff of the Tokyo District Prosecutors Office at 6:30 p.m.

Now forgive me for my skepticism, but twelve sounds like a suspiciously low number of officers to send into a company the size of Livedoor. When the public prosecutors went after the construction companies involved in the Aneha scandal, they pressed their way in by the hundreds.

Secondly, there is the hour of the raid. Public prosecutors normally do not raid during evening business hours. All the footage I have ever seen of the prosecutorial march has been late at night or just before the formal start of the business day.

However, a 6:30 p.m. coincides nicely with hot footage appearing on NHK's uncritical 7:00 p.m. news broadcast.

Let's see what TV Asahi has to say.

Even later: True to its modern form, TV Asahi missed the free kick.

Furutachi Ichiro admitted he did not understand the allegations (allegations because the prosecutor's office has yet to release a statement about its actions this evening) against his network's next door neighbor.

Furutachi introduced a purported market expert. According to his presentation, Livedoor is first suspected of trying to run a pump-and-dump scheme. Under the scheme, a Livedoor subsidiary announced the acquisition of what was nominally independent company. However, according to the report this firm was a de facto subsidiary of Livedoor's finance arm. Now which of these three company's shares were being pumped is unclear. The second allegation is that the nominally independent firm's latest financial report is fraudulent.

Now another possibility, which the expert introduced, is that the investigation is something of a fishing expedition--a way for prosecutors to troll through Livedoor's documents and records in search of securities violations.

Still no information on Horie's whereabouts or whether the prosecutors have left his private residence.