Ghosn Defends Himself in Court Saying He Was 'Wrongly Accused'
Carlos Ghosn was indicted for a second time as Japanese prosecutors build their case against the fallen car titan who has been in jail for almost two months.
The ousted Nissan Motor Co. chairman was indicted Friday for acts including temporarily transferring personal investment losses to Nissan in 2008, as well as for understating his compensation for three years through March 2018. Last month, he was already indicted for under-reporting his income for an earlier period. His lawyers said Friday they plan to apply for bail.
An indictment in Japan allows prosecutors to lay formal charges, a step along the way toward a trial. That could be as long as six months away, Ghosn’s lawyers said this week before losing an appeal against his ongoing detention.
The arrest of the high-flying executive on Nov. 19 at Tokyo’s Haneda airport has jolted the world’s biggest auto alliance, raising questions over whether the two-decade partnership between Nissan and French partner Renault SA will survive his downfall. While Nissan dismissed Ghosn as chairman shortly after his arrest, Renault has retained him as chairman and chief executive officer, saying it needs evidence of his wrongdoing.
Since Ghosn’s initial arrest, prosecutors have repeatedly extended his detention and re-arrested him over new allegations. Gaunt, handcuffed and with a rope around his waist, the 64-year-old appeared before a judge in a Tokyo court Jan. 8 -- the first time he’s been seen in public since his shock arrest. Ghosn gave a full-throated rebuttal to the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are merit-less.
Ghosn’s lawyers said Thursday the executive had developed a fever, which has subsided since. A doctor was tending to Ghosn, who is tired from the long detention and interrogations and has been locked up in a small Tokyo jail cell with a toilet and wash basin.
At the court, Ghosn said his actions were backed by managers inside the company as well as external lawyers. For example, his retirement payments were reviewed by legal experts inside Nissan as well as independent lawyers, and showed no intention of breaking the law. Another accusation -- that he rolled personal investment losses onto Nissan -- came to no cost to the company, Ghosn said. All told, Ghosn said he always acted with integrity and had never been accused of any wrongdoing in his professional career.
Ghosn’s aide Greg Kelly, who was arrested at the same time over his alleged role in helping the executive understate his pay, was released on a bail at 70 million yen ($635,000) on Dec. 25. Kelly has also denied wrongdoing, saying he will restore his name in court. Nissan has dismissed Kelly from his role as a representative director.
Ghosn has been widely credited with saving Nissan from failure in the late 1990s and bringing it together with Renault. His arrest came after a months-long investigation by Nissan into his conduct, a probe that was largely kept from its French partner. That lack of transparency and concern that Nissan will use Ghosn’s absence to push for more power within the alliance has heightened tensions between the two automakers.
Japan’s prosecutors have faced criticism for a lack of clarity and communication on how they are handling the case, with Ghosn held in detention without charge for longer than would be permitted in the U.K. for a suspected terrorist. If and when Ghosn will be out on bail, his movements are likely to be restricted to his home or a hotel, and he’ll need a court permission to leave the country, legal experts have said.
If proven, each of Ghosn’s alleged offense may carry a sentence of as much as 10 years, prosecutors have said. Nissan has also accused Ghosn of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract. The prosecutors haven’t officially charged him over these allegations.
The Ghosn drama has also raised questions about Nissan’s corporate governance, with the allegations spanning at least a decade. Nissan, as a company, has also been indicted along with Ghosn for the pay understatement.
CEO Hiroto Saikawa has sought to reassure staff that the carmaker is addressing governance shortcomings. On Thursday, Nissan said its board took on expanded powers and decided on an interim process to set compensation for directors and executives.
Nissan’s board removed Ghosn from the post of chairman on Nov. 22 and ejected American citizen Kelly from his position as a representative director. Renault, which is the biggest shareholder in Nissan, has refrained from removing Ghosn, instead appointing interim replacements.
Renault’s most powerful shareholder, the French state, says Ghosn is presumed innocent until proven guilty and has demanded Nissan share the evidence it’s collated against him. Renault’s board was due to meet Thursday, though wasn’t planning to make a decision on Ghosn’s role at the carmaker, Agence-France Presse reported.
Saikawa -- a one-time protege of Ghosn -- has emerged as a driving force in the carmaker’s investigation into the alleged wrongdoing by Ghosn and Kelly. Their arrests were the result of a coup by executives including Saikawa, Kelly’s wife, Dee Kelly, said in a video in December.
Saikawa was asked by reporters on the day Ghosn and Kelly were arrested whether a coup was underway at Nissan. He replied: “That is not my understanding. I didn’t make such an explanation and think you should not think of it that way.”