Japanese public prosecutors indicted Takafumi Horie, the former head of Internet portal operator Livedoor, and three other company executives on Monday for securities law violations.
The indictments came three weeks after the four were arrested on suspicion of violating Japan's Securities and Exchange Law. Those arrests came one week after the company's headquarters in central Tokyo were raided by prosecutors investigating the company.
Prosecutors believe that Livedoor deliberately misled investors when announcing details of the acquisition of a publisher, Money Life, by Livedoor group company ValueClick Japan. (ValueClick Japan is now called Livedoor Marketing)
The acquisition was announced in October 2004 however an investment partnership affiliated with Livedoor already held a majority stake in ValueClick Japan making it effectively a group company. The investment fund was paid for its ValueClick Japan stake with Livedoor stock, issued to fund the acquisition, which was then sold at profit, investigators believe.
Livedoor shares have fallen heavily in the month since the raids. On Monday they closed at YEN 61 per share, down YEN 30 on the day. On Jan. 16, just hours before the raids began, Livedoor stock was trading at YEN 696.