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April 26, 2011 1:37 pm
Takafumi Horie, one of Japan’s best known and controversial internet entrepreneurs, is going to jail after the Supreme Court rejected his appeal against a 30-month sentence for accounting fraud.
Still enjoying a wide following, particularly among young people, the 38-year-old on Tuesday announced on Twitter to his 687,000 followers that he expected to go to jail in about a month.
Mr Horie was handed the sentence in 2008 – one of the harshest ever for white-collar crime in Japan – in a dramatic fall from grace for the maverick entrepreneur credited with shaking up Japan’s conservative and consensus-driven business world with his young and brash style.
As a 22-year-old college drop-out, Mr Horie founded Livedoor and turned it into an acquisitive business spanning online car sales to consumer finance with a market capitalisation of Y730bn ($9bn) at its peak.
He moved the company into glitzy offices in the same building as Goldman Sachs and Yahoo Japan and made an audacious attempt to buy Fuji TV, one of Japan’s leading broadcasters, shocking the establishment but delighting those who wanted to see change.
Mr Horie was even recruited by Junichiro Koizumi, Japan’s reform-minded prime minister, to run in the 2005 lower house elections, which he lost to Shizuka Kamei, a conservative politician.
He became a hero to many young aspiring entrepreneurs and Livedoor, which he dreamed of turning into the world’s largest company by market capitalisation, became a household name.
When he and fellow senior executives were accused in 2006 for falsifying corporate accounts and spreading false information about an acquisition to boost the group’s profits, the Tokyo Stock Exchange was forced to halt all trading at one point because of panic selling in what came to be known as the “Livedoor shock”.
It is a mark of how Mr Horie has remained a popular figure that he is still affectionately known by his nickname, “Horiemon” and his supporters still claim that his arrest was a backlash against western-style capitalism.
That has allowed him to re-invent himself in the past few years as a commentator and management guru.
While “Livedoor shock” cast a pall over the technology sector for years, several internet start-ups in Japan have managed to shrug off the event.
Rakuten, which was founded by Hiroshi Mikitani 14 years ago, is now Japan’s largest internet shopping mall with a market capitalisation of Y963bn and is rapidly expanding overseas.
Gree, which began as a hobby for Yoshikazu Tanaka, its founder, is the largest social networking service in Japan. It was listed on the first section of the TSE, just five years after being founded, making Mr Tanaka the only dollar-billionaire in Asia under 35 who didn’t inherit his fortune.
Livedoor’s holding company had sold most of its assets since 2006 and the last remaining unit, the internet portal, was sold last year to NHN Corp, South Korea’s leading portal, for just Y6.3bn.
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