Masafumi Okanda, 32, and four others abducted a 33-year-old executive of Liquid Audio Japan and held him for two days to prevent him taking a business trip to the US, Kyodo News reported quoting Tokyo police. At the time 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 new board created for Internet and high potential start up companies. Shares in the company closed the first day of trading at 6 million yen, a doubling of their listing price, and soon the Internet stock boom had propelled them to more than 12 million yen but the ride was short-lived. Stock in the company closed today down 50,000 yen at 361,000 yen.
The arrest comes days after investigative and risk management company Kroll Associates said it had found 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 analysing the backgrounds of 70 executives for Internet companies, it found 27, or 39 per cent, had pasts that involved crimes such as fraud, undisclosed bankruptcies or organised crime. A normal number is nearer 10 per cent, it said.