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Livedoor Shock Triggers Tokyo Market Halt

1, 18. 2006

Another scandal over Livedoor Co. is coming to light. The IT firm, raided by prosecutors yesterday, allegedly fudged its financial statements. Livedoor fabricated its own book closing for the fiscal year ending Sep. 2004, covering up its losses by transferring profits from its affiliate companies, according to the top story of Yomiuri Shimbun on Jan. 18. The news led to the nosedive in share prices and the rush of selling orders in the market, finally forcing the Tokyo Stock Exchange Market to suspend all share trading in the afternoon. In both stock and foreign exchange markets, trading is shifting to Japan-selling, as foreign investors compare the suspected frauds to the Enron scandal, in which its book was cooked on a massive scale. Livedoor is sending a shock wave throughout the market, as the media cover various allegations, including illegal share price gouging, window-dressing and falsified auditors' reports.

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