
I previously
blogged about Japanese Internet entrepreneur Takefumi Horie, discussing how his brash, aggressive tactics riled Japan's traditional business elite while winning admiration from many in the younger generation.
Well, in Japan it's often said the the nail that sticks up gets hammered down. And in one of those stories (like the
Aneha construction scandal) that I never really got around to blogging about, Horie has been getting hammered hard since mid-January, when Japanese prosecutors
raided the offices of his company, Livedoor, looking for evidence of securities law violations.
Horie was eventually
arrested on an assortment of charges, including using misleading information to pump up the share price of a Livedoor subsidiary and falsifying some accounts.
In the past, Horie had been criticized for unconventional business tactics like acquiring shares in a takeover target in after-hours trading, or for using aggressive stock splits to "drive up" Livedoor's share price (a rather silly accusation, as I discussed
here.) But none of that was illegal. This time, the powers that be finally found a crime to pin on him. Livedoor's stock has plunged 85% since the raid, and Horie, who previously lived in a luxury apartment in central Tokyo, has been sitting in a tiny
jail cell. (And in perhaps the ultimate indignity, he hasn't been able to update his
blog since January 22.)
Horie is neither a dangerous criminal nor an obvious flight risk, so you may be wondering why he needs to be confined under harsh conditions while awaiting a possible trial. Well, as the
Economist explains, the Japanese criminal justice system works quite differently from what Americans have come to expect after years of
Law and Order reruns:
Because [the Japanese police] do not like to be proved wrong, and because prosecutors press ahead only with cases that are built upon confessions, both groups take full advantage of their sweeping powers to persuade suspects to talk. They can hold suspects for up to 23 days, for example, without charging them. Research from the United States suggests that most suspects cannot hold out for anywhere near that long without offering a confession, genuine or not.
In Japan, moreover, suspects enjoy only limited access to their defence lawyers during this long confinement. Although the constitution grants defendants a right to counsel, that right means little in practice until a formal indictment occurs. The police routinely restrict access to defence lawyers during the holding period, while taking the opportunity to question suspects frequently.
These tactics work. Once a case goes to trial, it's as good as over: Japanese prosecutors have a conviction rate
above 99%.
So the cops want Horie to confess. The only problem is, as the
Yomiuri Shimbun reports, he's refusing to play along:
As the period of detention for former Livedoor Co. President Takafumi Horie was extended by 10 days Friday, he continued to deny allegations that he broke the Securities and Exchange Law.
A prosecution source said: "His denial is within the scope of our assumption. It's possible to prove his conspiracy with other executives [to break the law]."
But investigation sources said the prosecutors seemed to be fighting a hard battle with Horie, 33, in the interrogation room.
Of course. By not confessing by stubbornly maintaining his innocence Horie is refusing to play his part in an age-old ritual. As the accused, Horie is expected to admit his guilt and apologize; only then can he be accepted, humbled and chastened, back into society. But just as Horie the businessman took the Western approach of cleverly exploiting the rules to their fullest possible extent, Horie the suspect is taking the Western approach of actually forcing the prosecution to prove its case. I tell ya, the guy has some nerve.
I don't know whether Horie is guilty. But I have a sneaking suspicion that prosecutors could dig up evidence of wrongdoing by a great many, if not most, Japanese companies if they were so inclined. And I know that a civilized justice system cannot be built on coerced confessions.