If Junichiro Koizumi personifies a new cult of the media personality in Japanese politics, fallen internet tycoon Takafumi Horie has made as big an impact on the corporate sphere of the world's second-biggest economy. At just 33 - 30 years the prime minister's junior - Mr Horie symbolised a new generation of entrepreneurs, unafraid to challenge the business establishment and unfettered by the hidebound civility of the conservative old guard. While reform-minded Mr Koizumi presided over Japan's economic resurgence and the return of confidence to its stock market, Mr Horie became the icon of a new corporate culture championed by the prime minister - the archetypal symbol of the brave new face Japan Inc presented to the world. His bold buyouts and disregard for convention made him a television star. Domestic and international investors alike lapped it up. Shares in his internet services company, Livedoor, rose 90 per cent last year and its market capitalisation stood at US$6 billion. Now that he and three executives have been arrested on suspicion of spreading false information to inflate share prices, Livedoor's shares are in free fall and the market values the start-up company - formerly known, perhaps prophetically, as Livin' on the Edge - at US$2 billion. The knock-on effect on investor confidence saw a plunge in share prices that led the Tokyo stock exchange to halt trading for only the second time in its history. The allegations of price-ramping remain unproved, although the arrests mean they must be taken seriously. This raises the larger question of what the scandal means in the longer term to cultural change in corporate Japan. Mr Horie is still seen by younger Japanese, inspired by the self-made success and style of a university dropout, as representing their generation. But the business establishment, raised to believe that lasting success is achieved by hard work, disapproved of his aggressive and novel style. His hostile takeover bid last year for Fuji-TV, Japan's biggest private broadcaster, was seen as a particular affront. Now that the future of his empire is uncertain, politicians opposed to Mr Koizumi's economic reforms have been quick to question his support for Mr Horie. And there is concern that the tendency to link Livedoor's alleged business practices with other start-ups, particularly those in the internet sector, will taint new businesses and discourage the new entrepreneuralism in Japan. The scandal is bound to make investors more cautious. But it hardly justifies a retreat into the conservatism of the past. There is, however, room for improvement in monitoring and oversight of the markets. Mr Koizumi would go a long way towards reassuring nervous investors if he told financial and stock exchange authorities that they, too, should keep up with the times and adopt world best practice in investor protection.