Takafumi Horie
Encyclopedia
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
who founded Livedoor
Livedoor
is an Internet service provider based in Tokyo, Japan, that runs a web portal and numerous other businesses. The company was founded and led in its first 10 years by Takafumi Horie, known as "Horiemon" in Japan...
, a website
Website
A website, also written as Web site, web site, or simply site, is a collection of related web pages containing images, videos or other digital assets. A website is hosted on at least one web server, accessible via a network such as the Internet or a private local area network through an Internet...
design operation that grew into a popular internet portal. After being arrested on accusations of securities fraud
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
in 2006, he severed all connections with the company. He was granted bail, and the trial began on September 4, 2006. On March 16, 2007, Horie was sentenced to imprisonment of 2 years and 6 months.
He is popularly known as due to his resemblance to Doraemon
Doraemon
is a Japanese manga series created by Fujiko F. Fujio which later became an anime series and an Asian franchise...
, the chubby robot cat in a popular Japanese cartoon. The name Horiemon was also given to a racehorse he owned, after the name had been chosen by voting on a Livedoor website.
Early life
Horie was born in YameYame, Fukuoka
is a city located in Fukuoka, Japan.As of 2003, the city has an estimated population of 39,372 and the density of 1,000.81 persons per km². The total area is 39.34 km².The city was founded on April 1, 1954....
, Fukuoka Prefecture
Fukuoka Prefecture
is a prefecture of Japan located on Kyūshū Island. The capital is the city of Fukuoka.- History :Fukuoka Prefecture includes the former provinces of Chikugo, Chikuzen, and Buzen....
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, and was raised in an unexceptional household by a salaryman
Salaryman
refers to someone whose income is salary based; particularly those working for corporations. Its frequent use by Japanese corporations, and its prevalence in Japanese manga and anime has gradually led to its acceptance in English-speaking countries as a noun for a Japanese white-collar...
father and mother from a farm
Farm
A farm is an area of land, or, for aquaculture, lake, river or sea, including various structures, devoted primarily to the practice of producing and managing food , fibres and, increasingly, fuel. It is the basic production facility in food production. Farms may be owned and operated by a single...
ing family.
He was a student at the department of literature at the University of Tokyo
University of Tokyo
, abbreviated as , is a major research university located in Tokyo, Japan. The University has 10 faculties with a total of around 30,000 students, 2,100 of whom are foreign. Its five campuses are in Hongō, Komaba, Kashiwa, Shirokane and Nakano. It is considered to be the most prestigious university...
and was going to major in religion
Religion
Religion is a collection of cultural systems, belief systems, and worldviews that establishes symbols that relate humanity to spirituality and, sometimes, to moral values. Many religions have narratives, symbols, traditions and sacred histories that are intended to give meaning to life or to...
, but dropped out after establishing a website development company called Livin' on the Edge in 1995 with friends and classmates.
Business career
In 2004, Horie tried to buy the Kintetsu BuffaloesKintetsu Buffaloes
The was a Nippon Professional Baseball team based in Osaka, Japan, which were in the Pacific League. The team was owned by Kinki Nippon Railway Co. and later sold to the Orix Group, the owner of the Orix BlueWave baseball team, in 2004...
baseball team. The team rejected the offer, but the incident put him in the national spotlight.
Horie was criticized by conservative business circles in Japan for his unconventional manner — everything from his informal attire to the practice of corporate expansion through hostile takeover. In a country where neckties are the norm for businessmen, he was frequently seen wearing t-shirt
T-shirt
A T-shirt is a style of shirt. A T-shirt is buttonless and collarless, with short sleeves and frequently a round neck line....
s or unbuttoned collared shirts. While the media demonized him for his challenge of the status quo, it also capitalized on the entertainment
Entertainment
Entertainment consists of any activity which provides a diversion or permits people to amuse themselves in their leisure time. Entertainment is generally passive, such as watching opera or a movie. Active forms of amusement, such as sports, are more often considered to be recreation...
he offered with his non-conformist attitude.
In 2005, Horie quietly bought a large number of shares in Fuji Television
Fuji Television
is a Japanese television station based in Daiba, Minato, Tokyo, Japan, also known as or CX, based on the station's callsign "JOCX-DTV". It is the flagship station of the Fuji News Network and the ....
and attempted a hostile takeover. Since Japan had few laws governing defensive tactics by takeover targets, a compromise was arranged in which he was made a joint director of Fuji Television. Laws on M&A
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
were hastily introduced thereafter in the country, modeled after on the regulations in the United States.
In 2005, at the 56th International Astronautical Congress
International Astronautical Federation
International Astronautical Federation , the world's foremost space advocacy organisation, is based in Paris. It was founded in 1951 as a non-governmental organization. It has 206 members from 58 countries across the world. They are drawn from space agencies, industry, professional associations,...
in Fukuoka
Fukuoka, Fukuoka
is the capital city of Fukuoka Prefecture and is situated on the northern shore of the island of Kyushu in Japan.Voted number 14 in a 2010 poll of the World's Most Livable Cities, Fukuoka is praised for its green spaces in a metropolitan setting. It is the most populous city in Kyushu, followed by...
, Horie unveiled a plan for space tourism
Space tourism
Space Tourism is space travel for recreational, leisure or business purposes. A number of startup companies have sprung up in recent years, hoping to create a space tourism industry...
. The spacecraft he planned to develop was based on the design of a Russian TKS spacecraft
TKS spacecraft
TKS spacecraft was a Soviet spacecraft design in the late 1960s intended to supply the military Almaz space station. The spacecraft was designed for manned or autonomous cargo resupply use...
. Horie said that he planned to invest in space development and that he wanted to launch a manned rocket within five years. The project was called "Japan Space Dream — A Takafumi Horie Project."
Political campaign in 2005
Horie announced on August 19, 2005 that he would run in the snap 2005 general election as an independentIndependent (politician)
In politics, an independent or non-party politician is an individual not affiliated to any political party. Independents may hold a centrist viewpoint between those of major political parties, a viewpoint more extreme than any major party, or they may have a viewpoint based on issues that they do...
in the Hiroshima sixth district. He contemplated running as an official LDP
Liberal Democratic Party (Japan)
The , frequently abbreviated to LDP or , is a centre-right political party in Japan. It is one of the most consistently successful political parties in the democratic world. The LDP ruled almost continuously for nearly 54 years from its founding in 1955 until its defeat in the 2009 election...
candidate against LDP rebel Shizuka Kamei
Shizuka Kamei
is a Japanese politician.-Early life:He was born in the city of Shōbara in Hiroshima Prefecture into a poor family. He studied at the department of economics at University of Tokyo and worked his way through school through various jobs, including singing at a cabaret.Upon graduation in 1960, he...
, but chose instead to run as an independent, while keeping the support of the LDP leadership. He lost the election and returned to Tokyo to continue his business career. Kamei won the election in a rather close count of 110,979 to 84,433.
Investigation for securities fraud
On January 18, 2006, Japanese prosecutors raided the offices of Livedoor and Horie's home on suspicion of securities fraudSecurities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
and money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
. Livedoor's share price fell 14.4 percent in one day, with sell orders so numerous that trading volume prompted the Tokyo Stock Exchange
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
to close 20 minutes early for the first time in its history. The Nikkei index
Nikkei 225
The , more commonly called the Nikkei, the Nikkei index, or the Nikkei Stock Average , is a stock market index for the Tokyo Stock Exchange . It has been calculated daily by the Nihon Keizai Shimbun newspaper since 1950. It is a price-weighted average , and the components are reviewed once a year...
lost 465 points, its largest drop in nearly two years; the ramifications were felt in other markets around the world, especially in Asia.
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."
On January 23, 2006, Horie was arrested by Tokyo district public prosecutors, and on January 24, he announced his resignation as CEO. On April 27, 2006, he was released on ¥300 million bail on the condition that he refrain from any contact with Livedoor or its employees. Horie said he would not participate in the company's management again. Though indicted on charges of fabricating financial reports and spreading false information to investors, he continues to assert his innocence.
Horie's net worth is estimated to have fallen from $1.3 billion in December 2005 to $280 million in June 2006.
Horie's trial for securities fraud began on September 4, 2006. Prosecutors sought a four-year prison sentence for Horie, who pleaded not guilty.
On March 16, 2007, Horie was found guilty of falsifying the company's accounts and misleading investors and was sentenced to 2 years and 6 months imprisonment. He appealed the punishment, but the Supreme Court of Japan
Supreme Court of Japan
The Supreme Court of Japan , located in Chiyoda, Tokyo is the highest court in Japan. It has ultimate judicial authority to interpret the Japanese constitution and decide questions of national law...
on 26 April 2011 upheld the sentence.