Japan fund manager admits insider trading

TOKYO - A well-known Japanese fund manager acknowledged Monday he had engaged in insider trading in an unfolding case that is drawing intense attention in this nation, where aggressive investment funds are still relatively rare. Yoshiaki Murakami, president of MAC Asset Management widely known as Murakami Fund, rose to fame as an outspoken proponent of investor rights and free markets. But he was widely viewed with suspicion by many among the old-guard business establishment as just being out for money and representing dubious foreign investors, and not interested in proper Japanese management practices. Murakami denied in a nationally televised news conference Monday that he intended to commit a crime when he bought a large number of Nippon Broadcasting System Inc. shares with advance knowledge that Internet startup Livedoor Co. would make a takeover bid for the radio network. He said he chanced upon that information and was not fully aware that his actions may constitute insider trading. Livedoor executives, including its flamboyant former president, Takafumi Horie, are embroiled in a separate criminal case, centered on falsifying is own earnings reports and those of a subsidiary. Horie was arrested earlier this year on charges of violating securities exchange regulations. Japanese media reports said Murakami could be arrested later Monday. Murakami, a 46-year-old former government bureaucrat, said he had signed a document with Tokyo prosecutors admitting wrongdoing, and he expected to be charged. He also said he was stepping down as fund manager although his fund will continue to operate. "I didn't intend to commit a crime," Murakami said. "I made a mistake." The Murakami Fund bought a large stake in Nippon Broadcasting shortly before Livedoor and Fuji Television Network Inc. launched a heated takeover battle for the radio broadcaster. Livedoor bought Nippon Broadcasting shares from other investors in off-hours trading last year, raising its stake to 35 percent from about 5.4 percent. The Murakami Fund is believed to have sold part of its stake to Livedoor, reaping hefty gains, media reports say. The fund recently has been under media scrutiny for accumulating a 47 percent stake in major Japanese railroad company Hanshin Electric Railway Co. Last week, a rival railroad, Hankyu Holdings Inc., offered to buy out Hanshin, apparently in reaction to fears that Hanshin will get taken over by Murakami. The ruckus over Hanshin illustrates Murakami's negative image among some in Japan's business community and the mainstream media. Insider trading carries a maximum penalty of up to three years in prison and a fine of up to 3 million yen ($26,860), upon conviction.