Ex-Liquid Audio Japan exec arrested

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by Martyn Williams

(IDG) -- Police arrested the former president of Internet music distribution company Liquid Audio (LQID) Japan and four others on Wednesday, on suspicion of confinement of a business colleague who was planning to start a similar company in the U.S., Japanese media reported.

Masafumi Okanda, 32, and four others allegedly abducted a 33-year-old executive of Liquid Audio Japan and held him for two days to prevent him from taking a business trip to the U.S., Kyodo News reported, quoting Tokyo police. At the time of the alleged abduction, Okanda was president of Liquid Audio Japan.

The report said the abducted executive was taken blindfolded and handcuffed in a car to hotels near Tokyo, where he and his abductors stayed for two days. He was then released in a forest in Yamanashi prefecture, west of Tokyo, said Kyodo, again quoting the police.

Tokyo police were unable to immediately comment on the reports.

Liquid Audio Japan was formed in June 1998 and launched into the limelight in late December 1999 when it became the first stock to debut on Tokyo Stock Exchange's Mothers market – a board created for Internet and high-potential startups. Shares in the company closed the first day of trading at 6 million yen ($58,000), a doubling of their listing price, and soon the Internet stock boom propelled them to more than 12 million yen, but the ride was short-lived. Stock in the company closed today down 50,000 yen, to 361,000 yen ($3,345).

The arrest comes days after the investigative and risk-management company Kroll Associates said it found that managers at Internet companies are around four times more likely to have shady backgrounds than those in other fields of industry. The company said after analyzing the backgrounds of 70 executives for Internet companies, it found that 27, or 39 percent, had pasts that involved crimes such as fraud, undisclosed bankruptcies or organized crime. A normal number is nearer 10 percent, it said.

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