Ethics Newsline®

TOKYO
As the fraud trial of Japan’s most famous Internet entrepreneur looms, a wider ethical issue is being examined in the nation’s press: Japan’s tentative shift to a more open economy.

The Tokyo-based Mainichi Daily News reported that the fraud trial of Takafumi Horie, 33, founder and former president of Livedoor, represents the conflict of the old guard versus the new: suit-clad corporate officers who hold stock in each other’s companies in order to bar outside influences versus T-shirt-wearing start-up gurus.

Horie is charged with a variety of security law violations, including allegedly falsifying earnings data to prop up stock prices, Bloomberg reported.

His trial is certain to be an enormous media event in Japan, with reporters expected to flood the courthouse, the Japanese Daily Yomiuri newspaper reported.

Horie, who rose to virtual rock-star status in Japan and is lionized still by some, has denied any lawbreaking, though four ex-Livedoor executives on trial with him admitted some complicity in previous court sessions, according to a report from the Japan Times.

Horie captivated many young Japanese with his brash, bare-knuckle business style. But his arrest and the subsequent delisting of his firm from the Tokyo stock exchange caused shock waves — and some significant financial losses — throughout the Japanese stock market.

Executives of his company later publicly apologized, saying the company lacked a “social conscience,” and promising to “regain society’s trust.”