The Tokyo Stock Exchange (TSE) briefly suspended the trading of Japanese Internet firm Livedoor Wednesday morning, following a media report saying it has falsified reported earnings.
The trading of the stock will resume in the afternoon after Livedoor said in a statement that it will study on alleged financial data falsification.
According to the Yomiuri Shimbun newspaper, Livedoor window- dressed its own closing account by transferring profits from three affiliates to cover a deficit of about 1 billion yen (about 8.70 million U.S. dollars) for the business term ending September 2004.
The Internet firm recorded a current account surplus of about 1. 4 billion yen (about 8.70 million dollars) in the fiscal period ending September 2004 after taking 2.4 billion yen (about 20.87 million dollars) profit from the affiliates, said the paper.
Meanwhile, Japanese prosecutors on Wednesday are investigating the company over allegedly falsifying financial data as well as on suspicion of violating the securities law, Kyodo News said, citing investigation sources.
Livedoor is listed on the TSE's Mothers market for start-ups. Its stock fell by the daily limit of 100 yen (about 0.87 dollars) to 596 yen (about 5.18 dollars) Tuesday, after a overnight raid of its headquarters and other locations by prosecutors over alleged securities law violations on Monday.
Japanese prosecutors said Monday that one of Livedoor's subsidiaries, Value Click Japan Inc. (now called Livedoor Marketing Co.), inflated profit figures in its financial statement released in November 2004, in an attempt to raise its stock prices.