Carlos Ghosn: Prosecutors move to keep ex-Nissan chief in jail over Christmas

Posted at 7:34 PM, Dec 20, 2018
and last updated 2018-12-21 08:27:05-05

Former Nissan chief Carlos Ghosn’s chances of being released from jail before Christmas have been hit by a new move against him by Japanese prosecutors.

Ghosn, who has been jailed for more than a month, scored a small legal victory on Thursday when a Tokyo court rejected prosecutors’ request to extend his detention on allegations of under-reporting his income. That raised the possibility that the high-profile auto industry executive could be released on bail before Christmas.

But on Friday, prosecutors said they had rearrested Ghosn over additional allegations of breach of trust, which means they can hold him for at least another two days. With court approval, they can extend the detention by a further 10 to 20 days.

Ghosn’s arrest in Tokyo last month on allegations of financial misconduct has shaken the international auto industry and strained the alliance he built between Nissan (NSANY), Renault (RNSDF) and Mitsubishi Motors (MMTOF).

Since his arrest on November 19, Ghosn has been fired as chairman by both Nissan and Mitsubishi Motors. Renault has appointed interim management but kept Ghosn on the payroll.

The prolonged detention of a prominent global business leader has drawn attention to the ability of Japanese prosecutors to hold suspects for extended periods without formally charging them.

His case has shown “how awful the Japanese criminal justice system is,” said Kana Sasakura, a law professor at Konan University in Kobe whose work includes fighting wrongful convictions in the country.

In their move to rearrest Ghosn on Friday, prosecutors alleged that he shifted 1.85 billion yen ($16.6 million) of losses from his private investments onto a Nissan subsidiary as the global financial crisis erupted in October 2008.

Lawyer: Ghosn maintains his innocence

Ghosn was indicted last week on allegations he under-reported his income by more than $40 million between 2010 and 2015 in Nissan disclosures. The charge carries a maximum prison sentence of 10 years. Prosecutors have also accused him of continuing the practice into 2017 but haven’t indicted him on that allegation yet.

Following Friday’s announcement by prosecutors, Ghosn’s Tokyo-based lawyer Motonari Otsuru said his client maintains his innocence and hopes to restore his honor at trial, according to The Wall Street Journal. Otsuru’s office didn’t respond to a request for comment from CNN.

Ghosn, a Brazilian-born French citizen who grew up in Lebanon, is yet to issue a more detailed public statement in response to the allegations against him. Legal experts have said that may be because of the limitations of his detention and to avoid jeopardizing his defense.

Greg Kelly, a former Nissan director accused of helping Ghosn under-report his income, was also indicted last week. But he wasn’t rearrested on the new allegations Friday.

Kelly, an American citizen, has now applied for bail, but his chances may be slim. It’s rare in Japan for indicted suspects to be released on bail, according to experts. Tokyo prosecutors declined to comment Friday on Kelly’s bail application.

Kelly’s wife said this week that he has been wrongly accused.

Nissan, which has also been indicted in the case, has said Ghosn and Kelly’s alleged misconduct was first brought to its attention by a whistleblower. An internal investigation uncovered serious problems, according to the company, which led it to alert authorities in Japan and begin cooperating with them.