TOKYO -- Former dot-com mogul Takafumi Horie was found guilty of securities laws violations and sentenced to two-and-a-half years in prison today , in a case that has come to symbolize the challenges Japan faces in policing rising startups.
Horie is expected to appeal the Tokyo District Court ruling. Horie had pleaded not guilty, saying he had been framed and accused prosecutors of having targeted him for standing out too much with his brash, unconventional business style.
Prosecutors had demanded a four-year prison term for the 34-year-old founder and former head of Internet services firm Livedoor Co., which Horie guided from unknown start-up to household name. In Japan, executives charged of such wrongdoing generally get a suspended sentence and avoid prison.
Chief Judge Toshiyuki Kosaka said Horie masterminded an elaborate network of decoy investment funds that were "established for the purpose of evading the law" and to "manipulate Livedoor's accounting."
"At that point, the prosecutors case was proven," he said.
Horie, dressed in a dark suit and tie, sat passively as the verdict was read, shuffling through papers on his desk.
Horie's trial, which opened in September , had drawn widespread media attention with the outspoken millionaire seen as a symbol of a new style of entrepreneurship in Japan.
Corporate culture in Japan has long been dominated by big-name companies that conducted business through a cozy network of group-linked companies.
Some experts say companies like Livedoor that made aggressive acquisitions were just beginning to emerge, and Japan still lacked clearly defined laws to police such moves.
Horie tumbled from stardom when prosecutors raided his company last year and then arrested him. He was kept incarcerated for three months, but he did not sign a confession as most suspects tend to do in Japan, often to win lighter sentences.
Some Livedoor shareholders were pleased by the verdict, saying it recognized the financial damages they suffered because of the fraudulent accounting.
Horie was known for his cocky flamboyance that stood out among old-fashioned executives.