TOKYO: The so-called "Livedoor shock" the investigation into Internet startup Livedoor Co that rattled Japan's stock market this week took a morbid turn yesterday when the dead body of an executive linked to the company was found in a suspected suicide.

A body believed to be that of Hideaki Noguchi, 38, vice-president of H.S. Securities Co, was found in a hotel in the southern prefecture (state) of Okinawa on Wednesday evening in a suspected suicide, according to local police spokesman Tatsuki Yara.

Noguchi is a former employee of On the Edge, the predecessor of Livedoor, which is at the centre of a widening investigation that triggered selloffs on the Tokyo Stock Exchange on Tuesday and Wednesday, with the benchmark index falling nearly 6 per cent. The market rebounded yesterday as the Nikkei 225 average rose 2.3 per cent.

H.S. Securities is among the companies raided this week by prosecutors in connection with possible fraudulent practices by Livedoor. The securities firm confirmed in a statement yesterday that it is under investigation by prosecutors and securities watchdog officials.

"We believe there wasn't anything wrong," Hideo Sawada, president of H.S. Securities, told a news conference. "We find (Noguchi's suicide) regrettable and feel a heartbreaking grief."

The Livedoor scandal broke on Monday when Tokyo prosecutors raided the company's offices to investigate allegations the company had violated securities laws spooking investors and driving share prices down.

Livedoor denies wrongdoing

Livedoor has repeatedly denied any wrongdoing. Yesterday it submitted a statement to the Tokyo Stock Exchange saying it did not break securities laws during a 2004 corporate takeover, as alleged in media reports.

The investigation has garnered intense media attention partly because of the fame of Livedoor Chief Executive Takafumi Horie, 33, an entrepreneur whose bold takeover attempts and maverick style has earned him both adulation and contempt.

A frequent guest on TV shows and author of books like "How to Make 10 Billion Yen," Horie also ran unsuccessfully for parliament in September.

Started by Horie in 1997, Livedoor offers various Internet-related services, including consulting, telecommunications, mobile sites and software development.

It has bought up a spate of companies through share swaps and by offering more of its own stock 27 companies between 2001-2005 in deals that have drawn particular scrutiny from investigators.

Reports have claimed that Value Click Japan Inc, the predecessor of a Livedoor subsidiary, provided false information during its takeover of Japanese publisher Money Life in 2004.

Livedoor allegedly concealed the fact that it already owned Money Life through an investment fund subsidiary of the Livedoor group, according to the reports. But the Internet firm denied those claims yesterday, saying the investment fund was not part of Livedoor.

Source: China Daily