Carlos Ghosn was indicted on new charges of misdirecting company money for his personal use, the most serious allegations yet against the former chairman who once led the alliance between Nissan Motor Co., Renault SA and Mitsubishi Motors Corp.
Using foreign corporate entities in 2017 and 2018, Nissan lost US$5 million that was funneled into accounts controlled by Ghosn, Japanese prosecutors said in a one-page statement Monday. While that was less than the amount they initially indicated when they arrested Ghosn again earlier this month, the allegations are the first to suggest that the former global auto executive directly transferred money from the company for personal gain.
After Ghosn’s first arrest, Nissan and Renault uncovered payments made through companies in Oman and Lebanon that allegedly were used for his personal gain, including corporate jets and a yacht.
Ghosn’s lawyer, Junichiro Hironaka, applied for his release on bail on Monday, saying that he expects his client to be released. Ghosn briefly won his freedom in March, but was arrested and jailed again on new allegations that eventually led to Monday’s charges. The executive, widely credited with saving Nissan from failure and bringing it together with Renault and Mitsubishi Motors, was first arrested in November, sending shockwaves across Japan, France and the global auto industry.
The former chairman has denied the prior charges against him, blaming them on “a very dirty game” by Nissan executives determined to oust him from the alliance. Ghosn has vigorously denied the previously filed indictments against him for transferring personal trading losses to Nissan, under-reporting his income and falsifying documents.
Shin Kukimoto, deputy chief prosecutor at the Tokyo District Public Prosecutors Office, declined to comment on Ghosn’s request for release on bail.
Earlier on Monday, Nissan filed a criminal complaint against Ghosn for his actions. The Yokohama-based automaker sent a statement to prosecutors saying that it determined that payments made by Nissan to an overseas vehicle sales company via a subsidiary “were in fact directed by Ghosn for his personal enrichment and were not necessary from a business standpoint,” Nissan said in a statement.
“Nissan is requesting appropriately strict penalties,” the automaker said in the statement. “Nissan takes this unfortunate situation very seriously and again expresses sincere regret for any concern caused to our valued stakeholders.”
Nissan, which swiftly removed Ghosn as chairman days after his first arrest, is seeking to turn over a tumultuous chapter in its ties with Renault. The detention of the former global auto titan threatened to derail their partnership, the world’s biggest auto alliance. Since then the three partners set up a new governance structure, led by Renault Chairman Jean-Dominique Senard, designed for smoother and more equitable decision-making.
Another lengthy stay in prison, with limited access to his lawyers, could make it harder for Ghosn to prepare for a trial that may start later this year or next year. Suspects in Japan routinely endure lengthy pre-trial detentions and repeated grillings by prosecutors without legal counsel.
Periodically rearresting a suspect on suspicion of new charges lets prosecutors keep the suspect in custody while attempting to build a case or secure a confession. Given that Monday’s charges don’t cover the full timeframe of earlier allegations by prosecutors, it’s possible that they will file additional indictments.
When he was first jailed, Ghosn lost 15 pounds (7 kilograms) and underwent hours of questioning daily. Two of Ghosn’s daughters told the New York Times in December that his cell wasn’t heated, that he had asked repeatedly for blankets and that he had been denied pen and paper. Another extended stay could refocus international attention on the workings of Japan’s criminal justice system.
In a video released after he was detained again, Ghosn said he was worried about getting a fair trial. The 65-year-old called his rearrest “outrageous and arbitrary,” accused people at Nissan, whom he didn’t identify, of trying to silence him, and declared: “I will not be broken.”