Japan prosecutors seek jail for ex-Internet icon

TOKYO, Dec 22 (Reuters) Prosecutors sought a four-year jail term today for Takafumi Horie, the flamboyant former chief executive of Japanese Internet firm Livedoor, who is on trial for fraud, media said.

The T-shirt-wearing 34-year-old, known for his aggressive business tactics and extravagant lifestyle, was once seen by some as a symbol of a dynamic new capitalism that could shake up Japan's corporate establishment.

Such expectations collapsed when he was arrested in January.

The author of several books on business, including ''How to Make 10 Billion Yen,'' Horie has denied charges of filing false financial statements.

He told the court last month he was ignorant of financial matters and relied so heavily on his chief financial officer, Ryoji Miyauchi, that Miyauchi came to dominate the company.

Miyauchi in turn testified that Horie pressured aides to inflate earnings at Livedoor and was kept informed of crooked accounting procedures.

''He was guilty of dishonesty, but tried to shift responsibility by making his employees look like liars,'' prosecutors were quoted as saying by public broadcaster NHK television as they summed up their case against Horie.

A decision in the case is expected early next year.

In addition to a possible jail sentence, Horie will have to contend with lawsuits from shareholders over the 5 billion dollars in market value shed by Livedoor following his arrest.

The surprise arrest sparked a share sell-off that swamped the computer system at Tokyo Stock Exchange, which remained on shortened trading hours for three months.

Horie had won fans among young people for his daring in a hostile takeover bid for a conservative media group and an attempt to buy a baseball team, but made enemies in the business establishment.

His downfall was an embarrassment for the ruling Liberal Democratic Party, which backed the entrepreneur, nicknamed ''Horiemon'' for his resemblance to a pudgy cartoon cat, as a candidate in last year's general election.

A drop-out from the elite Tokyo University, Horie said in a recent interview he believed he was the victim of resentful Japanese bureaucrats in what he called a ''communist'' country.

''People in those high bureaucratic ranks of the Japanese socialist hierarchy and the mind-controllers in charge of the television stations really hate people like me who try to compete in the business world,'' Horie told the Financial Times.

REUTERS MS RK1021