Japan's Livedoor said today that it will team up with Internet service provider Usen in a business alliance, as part of its efforts to stay afloat after being indicted for financial fraud.
Under the deal, the two firms will collaborate on Internet business, including content, although the full details have yet to be decided, they said in a joint statement. Usen also confirmed its President Yasuhide Uno would personally acquire a 12.75% stake in Livedoor from Fuji Television Network for about 9.5 billion yen ($80.6m).
Livedoor, which has been indicted along with its founder Takafumi Horie and four associates for alleged financial fraud, has been seeking a partner to help secure its future. For Usen, an established cable and broadband operator, an alliance with Livedoor would give it a web portal for its Internet services.
As Livedoor used to be, Usen is headed by a young entrepreneur in his early 40s, Yasuhide Uno, who successfully created a manpower company before replacing his father at the helm of the broadcaster. Usen had sales of 15.4 billion yen ($131m) for the business year through August 2005, almost double that of Livedoor.
Earlier today, a Japanese court freed on bail three former executives at scandal-hit Livedoor but again refused to release Horie. Former chief financial officer Ryoji Miyauchi, ex-director Fumito Okamoto and former operating officer Osanari Nakamura were released on bail.
However, Horie again had his application turned down, as did Fumito Kumagai, who is still a Livedoor director despite having been indicted. Horie, who has been in jail since January 23, has now admitted to inflating Livedoor's sales in 2004 by about 1.58 billion yen.
Horie and his four associates were served fresh indictments on Tuesday for allegedly tricking investors by hiding losses at the once high-flying firm. Japanese prosecutors said the five were accused of falsely reporting a 5.03 billion yen pre-tax profit for the year to September 2004 to hide actual losses of 310 million yen. Livedoor shares will be delisted from the Tokyo Stock Exchange on April 14.
