The Tokyo Stock Exchange once again cut back trading in Livedoor after a flood of sell orders threatened to overwhelm its computer systems.
Livedoor’s shares traded for the first time since Tokyo prosecutors raided the internet group’s offices last Monday.
But the TSE said trading in the stock would be cut back further as an additional precaution against disruption to overall trading.
The exchange warned that if it had not curtailed trading in Livedoor it might have been forced to halt trading in all stocks, as it was forced to do last Tuesday after news of a probe into the company emerged.
Livedoor’s shares, which resumed trading for the first time on Wednesday, have faced a flood of selling since prosecutors began an investigation into accounting fraud and market manipulation by its top executives.
On Tuesday, Livedoor dismissed Takafumi Horie as president and representative director of the group he founded, a day after he and other senior executives were arrested.
Livedoor shares, which had fallen their maximum daily allowable limit almost every day since the prosecutors raided its offices, on Wednesday fell a further 22 per cent to Y137.
Trading in Livedoor shares had been cut back to 90 minutes on Wednesday, and will be restricted further to an hour from on Thursday, the TSE said. This is the first time the exchange has shortened the trading of a particular stock.
The TSE has placed Livedoor and Livedoor Marketing in a category of companies requiring special supervision, moving it one step closer to de-listing.
In a further indication that the shares could come under continuing pressure, Fuji TV, Livedoor’s second-largest shareholder, said the lock-up period, which prevented it from selling its shares until September 2007, was no longer valid due to Mr Horie’s arrest.
Fuji TV had acquired 133m shares in Livedoor for Y44bn ($380m) as part of its settlement with Livedoor, when the group gained a major stake in Nippon Broadcasting, then Fuji TV’s parent company, and appeared poised to launch a hostile bid for the TV group.
Tokyo prosecutors, who have been questioning Mr Horie, intend to detain him and three other Livedoor executives for a further 10 days.
Under Japanese law, that period can be extended for another 10 days without bail.
An indictment would normally come during that period, automatically leading to a further detention of two months.