Former Livedoor Exec Says He Was Framed

Takafumi Horie leaves the Tokyo District Court after his final arguments in Tokyo Friday, Jan. 26, 2007. Former dot-com mogul Horie tearfully asserted his innocence Friday in a Japanese courtroom, accusing prosecutors of seeking his downfall through trumped up charges and targeting him as a famous businessman. (AP Photo/Kyodo News) (AP)

Livedoor, which operated an Internet portal and offered Web-related services, rose from an unknown startup to become a household name, drawing a large number of individual investors, partly because of Horie's fame. Individual investors, many of them amateurs at the stock market, took big losses when Livedoor shares nose-dived when Horie ran into legal trouble.

Another reason the trial has drawn attention is that Horie has pleaded not guilty _ a rare move in Japanese criminal trials. Many suspects sign confessions in advance, sometimes to win lighter sentences. Nearly all criminal trials in Japan end with guilty verdicts.

Still, Horie's case comes at a time when this nation is trying to reform its court system, planning to introduce jury trials for serious criminal cases in 2009. Now, a panel of judges reaches a verdict.

In the past, many have questioned the fairness of Japan's court system. A new movie by Masayuki Suo, the director of "Shall We Dance," which became a Hollywood remake, documents the tribulations of an innocent man who mistakenly becomes charged with being a groper on a train.

In closing arguments that preceded Horie's remarks, Yasuyuki Takai, his chief defense lawyer, compared Horie's case to a historical Japanese case in which businessmen were charged with false crimes related to alleged stock manipulation.

Takai also said the dummy funds in the prosecutors' charges weren't set up at Horie's bidding but were instead used by former Livedoor Chief Financial Officer Ryoji Miyauchi and a colleague to divert money from Livedoor for their personal gain.

Miyauchi, who has pleaded guilty in a separate trial, is a key prosecution witness and has testified that Horie orchestrated the schemes.

Takai accused prosecutors of forsaking their duty in choosing not to investigate Miyauchi and others who he said were stealing from Livedoor. They ignored the facts and used Miyauchi's testimony to back their own scenario for framing his client, Takai said.

He also said the allegations should have been examined under accounting standards, and it would have been clear the alleged "dummies" weren't illegal.

"The defendant is innocent," Takai said. "The prosecutors have done nothing to prove their case."