Japanese investment fund founder pleads not guilty to insider trading | VailDaily.com

Japanese investment fund founder pleads not guilty to insider trading

TOKYO – Japanese investment fund founder Yoshiaki Murakami pleaded not guilty Thursday to insider trading on the first day of his trial, which has riveted a nation still grappling with aggressive investing and takeovers.”I am convinced I’m innocent,” Murakami, wearing a dark suit and tie, said solemnly at the Tokyo District Court.The claim of innocence was a reversal of an earlier acknowledgment of guilt, which came hours before his arrest in June and was broadcast on national television.The case has drawn widespread attention here because investment funds have long been rare in Japan, where corporate raiders are frowned upon, and major companies used to hold shares in each other in a tight insular network.Prosecutors, in their opening statement, accused Murakami and his company, MAC Asset Management, of acquiring about 1.93 million shares of Nippon Broadcasting Systems Inc., and encouraging Internet firm Livedoor Co. to also buy a large stake in the radio broadcaster.Prosecutors said MAC raked in about 3 billion yen ($25.8 million) in profits from the scheme, according to a copy of their statement obtained by The Associated Press.The defense team told the court that Murakami never thought Livedoor had the money to pull off a takeover, although the attorneys acknowledged Murakami discussed a possible takeover with Livedoor executives.Crucial to the case is whether Murakami knew about Livedoor’s intentions to buy Nippon Broadcasting shares before his own purchase.If convicted, Murakami could face up to five years in prison and 5 million yen ($43,000) in fines, or both.Murakami said he had merely acknowledged guilt previously to spare his employees and business associates from being arrested and questioned.”If you look at our strategic analysis of the situation at the time, you’ll see that Livedoor wasn’t even on our radar,” he said.Before his arrest, the flamboyant Murakami drew a great deal of media attention because he was outspoken about how he pursued get-rich-quick schemes in investing with his fund.Murakami, 47, who has been released on bail, fascinated this conformist nation, where people are encouraged to act meek and modest, and an ascetic work ethic is highly respected.In the same way, another fallen entrepreneur, Livedoor founder and former chief executive Takafumi Horie drew followers, as well as individual investors, before his arrest earlier this year.Horie is on trial in the same court on charges of securities laws violations. Prosecutors say Horie set up dummy companies and inflated earnings to falsely boost the share prices of Livedoor and its subsidiaries.Horie has also pleaded not guilty, saying he was unaware of the dubious deals.Both Murakami and Horie are defying tradition in asserting their innocence in a criminal trial. Many suspects sign confessions even before their trials open, some hoping to win a lighter sentence.Murakami and MAC paid 9.95 billion yen ($85.8 million) to buy Nippon Broadcasting shares from November 2004 through January 2005, and encouraged Livedoor officials, including Horie, to also buy shares in the broadcaster, prosecutors said.Buying up Nippon Broadcasting could have led to a takeover of major media group Fuji Television Network Inc., as the broadcaster was a majority stakeholder in Fuji TV.”The accused, Murakami, believed that if Nippon Broadcasting shares could be sold off at a high price, then it would be possible to gain a massive profit,” prosecutors said.In February 2005, Livedoor acquired a 35 percent stake in Nippon Broadcasting. MAC sold part of its stake to Livedoor, reaping hefty gains, they said.Murakami denied he bought Nippon Broadcasting stock with Livedoor in mind.”I thought Horie was just kidding around,” he said. “I’m not a lawbreaking person. I want the facts to be revealed and look forward to the court’s judgment.”

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