TOKYO (Reuters) - Internet entrepreneur Takafumi Horie, who roiled corporate Japan with his aggressive style before being convicted on securities fraud, saw an appeal against his sentence struck down by Tokyo’s High Court on Friday.
The court rejected Horie’s claim that he was not guilty of securities fraud, including padding the earnings of Livedoor, the company he founded, and giving false information to prospective investors to drive up share prices.
“The crimes would not have been possible without instructions and approval (from Horie),” said judge Tetsuji Nagaoka.
Horie has not shown any true remorse and has not apologized to investors, the court said, upholding a lower court ruling that had sentenced Horie to two-and-a-half years in prison — an unusually harsh punishment by Japanese standards. “An actual prison term is unavoidable,” the court said.
The initial ruling in the lower court came as a surprise in Japan, where white-collar criminals can usually avoid jail time if they plead guilty and show remorse.
“The judges do not like Horie because of his past comments ... I think the verdict is completely unfounded and unconstitutional,” said Yasuyuki Takai, a member of Horie’s defense counsel.
Horie himself was not present to hear the verdict, but his lawyers said they would appeal to the Supreme Court on Friday, and they submitted a request for Horie’s release on bail.
For many younger Japanese, the 35-year-old Horie represented a new model of entrepreneurship, expanding a $50,000 Internet start-up into a conglomerate worth $6 billion at its peak.
Horie rose to fame in 2004 with his failed bid for a professional baseball team in the western city of Osaka and a later takeover battle with a major TV network.
After Horie and other Livedoor executives were charged in 2006, the company lost $5 billion in market value and sparked a share sell-off that crashed the Tokyo Stock Exchange’s computer system.
The company lost its stock exchange listing a few months later.
Horie’s aggressive takeover battles and acquisition strategies made newspaper headlines and shook up Japan’s conservative business establishment.
“The verdict is telling Japanese entrepreneurs that if they try M&A and fly against the establishment they will face a similar fate. If trials like this continue, people are going to lose trust in the system,” said Takai.
Editing by Hugh Lawson