TOKYO (AP) _ The Japanese broadcaster Fuji TV sued former dot-com luminary Livedoor on Monday for US$292 million in damages over losses it absorbed after buying a stake in the since-disgraced Internet portal company.
The lawsuit, filed by Fuji Television Network Inc. in Tokyo District Court, seeks compensation for the loss in value of nearly 134 million Livedoor shares the Tokyo-based broadcaster bought in 2005 for 44 billion yen ($373 million) as part of an alliance.
Fuji took a substantial loss when it later sold the shares to Livedoor’s new partner, Usen Corp., for about 9.5 billion yen ($80.5 million).
Livedoor Co. shares plunged after the company was raided by prosecutors last year, its top executives were arrested on charges of securities laws violations, including falsifying earnings, and the shares were delisted.
Earlier this month, the Tokyo District Court found Livedoor founder and former CEO Takafumi Horie guilty of securities laws violations and sentenced him to two and a half years in prison. Horie has appealed the decision.
Six other senior company officials have also been convicted on charges of securities laws violations.
Last week, the Tokyo District Court fined Livedoor 280 million yen ($2.4 million) _ the largest fine ever in corporate Japanese history for violating securities laws. Its subsidiary Livedoor Marketing was fined 40 million yen ($338,000).
Livedoor has been trying to revive its business under new management, although its credibility has been damaged. Its new management has said it may sue Horie and other former managers for damages. Company officials were not immediately available for comment on the Fuji TV lawsuit.
The tough fines and prison terms being doled out to those at the centre of the scandal are sending a strong message to companies that the government is taking a harder line against white collar corporate crime.
The Livedoor case has also prompted calls for clearer laws about stock trading as well as heavier penalties for falsifying earnings reports. Horie is widely perceived as having tested the legal loopholes and limits of Japanese securities laws.
James Post, management professor at Boston University, said the recent moves in Japan show an effort to crack down on cheating, but said Japan needs to show how restrictions will be enforced.
"Reasonable rules create level playing fields where each person has a chance to succeed," he said. "Japan’s business community has a stake in showing positive stories of honest, successful entrepreneurs to offset the damage of Livedoor."
In a separate lawsuit, about 3,600 individual investors have sued Horie and Livedoor for damages, saying they were duped into buying falsely valued shares.
Horie had been a celebrity for his gutsy takeover attempts and flamboyant lifestyle and had drawn a large number of individual investors to buy shares in the Internet company.