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Livedoor

From Wikipedia, the free encyclopedia
Livedoor
Native name
Chu thức hội xã ライブドア
FormerlyEdge Co.
Company typeKabushiki gaisha
IndustryInternet service
FounderTakafumi Horie
HeadquartersNishi-Shinjuku,
Tokyo
,
Japan

livedoor Co., Ltd.(Chu thức hội xã ライブドア,Kabushiki-gaishaRaibudoa)was a Japanese company that functioned as anInternet service providerand operator of aweb portalandblogplatform before being brought down by a scandal in 2006. The company was founded and led in its first 10 years byTakafumi Horie,known as "Horiemon" in Japan.Livedoorgrew into one of Japan's premier Internet businesses, putting over 1,000 employees on its payroll at its peak. Its reliance onacquisitionsandstock swapmergers to achieve growth also made it one of the country's most controversial enterprises. Its growth came to a resounding halt when scandal erupted in early 2006. An investigation of securities law violations led to a nosedive in the company's stock price. The Tokyo Stock Exchange delisted Livedoor on April 14, 2006.[1]The floundering company's properties were purchased bySouth Korea–basedNHN Corporationin 2010.[2][3]

TheISPandblogservices that bear the Livedoor name used to be operated byLine Corporation,developers ofLinemessaging services and theNaver Japansearch portal from 2012 - 2022. Line Corporation, based in Japan, was spun off from NHN Japan, an arm of its Korean parent, in February 2013.[3]

In 2022 Livedoor was sold toMinkabu[ja].In February of the same year, its founder Takafumi Horie became executive advisor to livedoor.

History

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Origins and growth

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Livedoor began in 1995 as Livin' on the Edge, astartupcompany run by Horie and a group of college friends[4]and was officially founded as Livin' On the EDGE Inc. in April 1996, inMinato,Tokyo.[5]In 1997, it was renamed Livin' On the EDGE Co., Ltd. Though initially a limited company (yugen kaisha), Livin' On the Edge was reorganized into ajoint-stock company(kabushiki kaisha) in July 1997 and within only 3 years, went public on theTokyo Stock Exchange'sMothersmarket in April 2000. In November 2002, Livin' on the Edge acquired the free Internet services business of Livedoor Corp., which had gone bankrupt. Livin' On the Edge changed its name to Edge Co., Ltd. in April 2003,[6]then adopted the name of the ISP business it had acquired from Livedoor Corp., by renaming itself livedoor Co. Ltd. (Livedoor), in February 2004.[7]This was followed by a 1:100 stock split.

In March 2004, during the2004 Nippon Professional Baseball realignment,Livedoor moved to acquire theKintetsu Buffaloes,a Japanesebaseballteam, but later withdrew its offer and, in September 2004, founded its own team (namedlivedoor baseball) and applied for admittance to Japan's professional baseball organization. The team'shome groundwas to be inSendai, MiyagiPrefecture, but livedoor lost the competition to be the city's home team toRakuten,a Japanesee-commercecompany; the team became theTohoku Rakuten Golden Eaglesand began play in2005.

Livedoor acquisitions in the U.S. includedMailCreations in Miami, Florida, in June 2004,which functioned as the company's U.S. headquarters. Livedoor entered search and contextual advertising spaces in America in November 2005.

A scandal involving securities law violations led the Tokyo Stock Exchange to delist Livedoor on April 14, 2006.[8][9]

Allegations

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Wikinews has news coverage related to Livedoor:

The case broke on January 16, 2006, when Tokyoprosecutorsraided several Livedoor locations, Horie's home, and the homes of other Livedoor and subsidiary executives on suspicions ofsecurities fraud.The raids spooked investors and sent shares plunging on January 17 and 18 as a widening criminal investigation sparkedpanic sellingon theTokyo Stock Exchange.Some brokers announced they would no longer allow use of the issue formargintrading. Volume was so heavy that it threatened to overload the TSE's computer system, prompting a halt in trading for the entire market—a breaking record and the first time this has ever occurred. The TSE ordered Livedoor to provide a formal response to the allegations. When the company filed a hasty report after a quick internal investigation, the TSE told executives to provide a more detailed report and threatened todelistLivedoor if allegations of improper activities proved valid.

On January 18, 2006, Hideaki Noguchi, an executive of H.S. Securities, a firm raided by prosecutors earlier in the week in connection with Livedoor, was found dead in aNaha,Okinawahotel room in what the authorities labeled asuicide.[10]

The authorities called in several Livedoor and subsidiary executives for questioning over several days, and Horie himself on January 23. After several hours of questioning Horie, investigators felt they had learned enough to press charges and petitioned for fourarrest warrants,which were granted. Horie, Livedoor's chief financial officer, and the presidents of two subsidiaries were arrested mid-evening for securities and accounting fraud.[11]They were held for two months without bail, and during this time, Livedoor's temporary Representative Director Fumito Kumagai was also arrested.[12]

Japan's Securities Commission filed a criminal complaint against the five arrested ex-executives of the company on March 13, 2006. Founder Horie was sentenced to 2.5 years in jail on March 16, 2007. Others were given various jail sentences four days later but appealed.[13]

Aftermath

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After losing 90% of its stock price in four months and strong evidence of securities fraud, Livedoor was delisted from the Tokyo Stock Exchange on April 14, 2006.[14]

Fuji Television sued the company for ¥35 billion in damages in March 2007;[15]1,000 individual investors filed a class-action suit in May 2006, eventually rising to 3,340 asking for ¥23 billion, which resulted in a final ruling of ¥7.6 billion against Livedoor,[16]and other similar suits resulted at least one judgment of ¥4.9 billion.[17]Livedoor in turn sued its own executives, with founder Horie settling for ¥21 billion and six others settling for a total of ¥760 million.[18]

Information obtained during the investigation led to the arrest and conviction of fund manager Yoshiaki Murakami for using inside information to profit off of a stake Livedoor purchased inNippon Broadcasting Systemin 2005.[19]

Horie published an autobiography during his appeals,Complete Resistance,in which he proclaims his innocence and states that he was being targeted only due to his infamy, not the actual nature or severity of any crimes.[20]

The veracity of the suspicions aside, many smelled conspiracy given the timing of the action. It was seen as a political move by defenders of the status quo to punish Horie for daring to challenge them, and to discredit him and the business practices he had come to represent, which Horie's opponents considered distasteful and "un-Japanese."[21]

In order to prevent a recurrence of the scandal, Japan passed a law similar toSarbanes–Oxley,nicknamedJ-SOX,on June 14, 2006.

Livedoor Holdings

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In 2007, the company spun off to create a new subsidiary that retained the name of "Livedoor" and most of its portal-related businesses and itself became a pure holding company named "Livedoor Holdings"that oversaw the legal and financial management of its subsidiaries (reportedly 44 subsidiaries as of the end of 2005[22]) including the new Livedoor. In 2008, Livedoor Holdings changed its name to "LDH Corporation."[23]

Sale

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During the upheaval in 2006 and 2007 rumors spread that Livedoor was preparing a $2 billion initial public offering in 2008. Several technology companies expressed interest in participating but the IPO never materialized. Livedoor instead put itself up for sale. In early 2010South Korea-basedNHN Corporationbought Livedoor for a reported ¥6.3 billion.[2]

Liquidation

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After completing the sale of Livedoor and other subsidiaries and paying dividends to its shareholders,LDH Corporationentered into voluntary liquidation by the shareholders' resolution in August 2011 and completed liquidation in December 2012 after distributing residual assets to its shareholders.

Offices

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The headquarters of the original Livedoor company were located in theSumitomo Fudosan Nishishinjuku Building(Trụ hữu bất động sản tây tân túc ビル,Sumitomo Fudōsan Nishi-Shinjuku Biru)inNishi-Shinjuku,Shinjuku,Tokyo.[24]Additional corporate offices were located on the 38th floor of theRoppongi Hills Mori Towerat 10-1,Roppongi6-chome,Minato,Tokyo, 106-6138, Japan.

See also

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References

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  1. ^"Livedoor share trading ends ahead of delisting by TSE".Asahi Shimbun.12 April 2006. Archived fromthe originalon 22 April 2006.Retrieved8 January2015.
  2. ^ab"S.Korea's NHN buys Japanese Internet provider Livedoor".The Independent.London. 2010-04-13. Archived fromthe originalon June 2, 2012.Retrieved2010-09-29.
  3. ^abMatt Brian (6 February 2013)."NHN Japan Spins Off LINE, Targets International Expansion".The Next Web.Retrieved8 January2015.
  4. ^"livedoor".Archived fromthe originalon 23 February 2007.Retrieved8 January2015.
  5. ^"livedoor".Archived fromthe originalon 23 February 2007.Retrieved8 January2015.
  6. ^"livedoor".Archived fromthe originalon 27 November 2006.Retrieved8 January2015.
  7. ^"livedoor".Archived fromthe originalon 23 October 2006.Retrieved8 January2015.
  8. ^[1]ArchivedApril 22, 2006, at theWayback Machine
  9. ^"Welcome to nginx!".Archived fromthe originalon August 15, 2007.RetrievedApril 14,2006.
  10. ^"Figure in scandal kills himself as prosecutors start questioning officials".Asahi Shimbun.20 January 2006. Archived fromthe originalon 26 April 2006.Retrieved8 January2015.
  11. ^"Livedoor chief Horie, three executives arrested".Financial Times. 2006.Retrieved2010-09-29.
  12. ^"Livedoor's new boss arrested".The Japan Times. 2006.Retrieved2010-09-29.
  13. ^"Livedoor accountant first to do real time for fraud".The Japan Times. 2007.Retrieved2010-09-29.
  14. ^"Livedoor stockholders to sue for compensation".The Japan Times. 2006.Retrieved2010-09-29.
  15. ^"Fuji TV files suit against Livedoor".The Japan Times. 2007.Retrieved2010-09-29.
  16. ^"Shareholders win suit for Livedoor damages".The Japan Times. 2009.Retrieved2010-09-29.
  17. ^"Livedoor to pay shareholders ¥4.9 billion".The Japan Times. 2009.Retrieved2010-09-29.
  18. ^"Livedoor damages lawsuit settled".The Japan Times. 2010.Retrieved2010-09-29.
  19. ^"Murakami given two-year sentence".The Japan Times. 2007.Retrieved2010-09-29.
  20. ^"Horie says he, Okubo both were railroaded".The Japan Times. 2010.Retrieved2010-09-29.
  21. ^Nakamoto, Michiyo; Pilling, David (January 16, 2006)."Japanese lawmen head for the Hills".Financial Times.
  22. ^"UCLA Center for Near Eastern Studies:: JAPAN: Livedoor may sell stake to investors to raise capital".128.97.165.17. Archived fromthe originalon 9 December 2014.Retrieved8 January2015.
  23. ^"LDH Corporation: Private Company Information - Businessweek".Businessweek.com.Archived fromthe originalon December 27, 2008.Retrieved8 January2015.
  24. ^"Hội xã khái yếu - hội xã án nội - chu thức hội xã ライブドアArchived2011-12-04 at theWayback Machine."Livedoor. Retrieved on December 14, 2011." 〒160-0023 đông kinh đô tân túc khu tây tân túc 7-20-1 trụ hữu bất động sản tây tân túc ビル24F,25F ( tổng hợp thụ phó: 24F ) "-MapArchived2012-04-15 at theWayback Machine
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