Japan Businessman Charged With Securities Violations

Internet entrepreneur Takefumi Horie, whose brash business style shook up political and social circles in Japan, was charged today with inflating financial figures and spreading phony information during a takeover in 2004.

The charges, which were also filed against three other former executives of Horie’s Livedoor Co., are widely expected to be part of a much broader indictment against the Internet portal.

Securities regulators have asked prosecutors to examine whether Livedoor padded its books with nonexistent profits.

Horie has seen his upstart empire go from being Japan’s iconic new media behemoth to a disgraced shell in just three weeks. Valued at over $6 billion in January, Livedoor is now worth less than a tenth of that.

Horie and the other executives were arrested after raids on Livedoor offices in Tokyo, and have been held in a detention facility for the last three weeks. The arrests Jan. 23 set off a selling spree that caused the Tokyo Stock Exchange to shut down briefly.

Prosecutors were expected to re-arrest all four later today. That would allow the men to be held and questioned for another three weeks.

Meanwhile, the company Horie founded is imploding. Japanese media have reported that Livedoor’s banks have balked at extending further financing, and some of its affiliated companies are attempting to sever ties with their parent in order to survive.