Japanese prosecutors today arrested Takafumi Horie, the celebrity chief executive of Livedoor, the internet services provider, for suspected securities laws violations.

Three other executives of the company were also taken into custody.

Mr Horie has repeatedly denied wrongdoing.

"I have no recollection on any of the allegations. And I don’t even know how to comment because I have no idea what kind of investigation the media reports are coming from. That’s the situation," Horie wrote in his Japanese-language blog over the weekend.

Japanese prosecutors can hold suspects for as long as three weeks without filing official charges. The prosecutors were due to hold a news conference at their office later today.

Today's arrests followed a week-long investigation into Livedoor, which began with a surprise raid on its Tokyo headquarters and 33-year-old Mr Horie’s home a week ago.

News of the raid consequently sparked turmoil in Japan’s stock market. Since then, investigators have sifted through thousands of Livedoor e-mails in search of evidence linking Mr Horie to suspected securities law violations.

The Times reported last week that sources close to the investigation said the main line of enquiry had focused on stock-swap deals carried out by the company.

The apparent suicide of Hideaki Noguchi, a former business ally, left Mr Horie visibly stunned last week, able only to tell a press conference: "I don’t want anyone else to die."

The 38-year-old victim had been a key figure in Livedoor’s development as a listed company.

Jitters, largely prompted by last week's probe into Livedoor and Mr Horie, a celebrity in Japan for his bold takeovers and criticism of the corporate Japan's old guard, sent the Tokyo stock market into negative territory again today .

The benchmark Nikkei 225 lost 336.04 points, or 2 per cent, to close at 15,360.65 today, bringing its losses since the start of last week to 6.7 per cent.

The Tokyo Stock Exchange placed Livedoor shares under a warning late Friday for not disclosing enough financial details about the recent allegations. The exchange has been considering delisting the company.

Shares in Livedoor, a favourite stock with small Japanese investors, plunged to ¥256 on Monday, after falling by the maximum amount of ¥80 allowed. A week ago, they were trading at ¥696.

Meawnhile, having been forced on Wednesday to shut down 20 minutes early for lack of system capacity, the world’s second-largest bourse remains under huge pressure to bring itself up to acceptable international standards.

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