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Ghosn's fresh indictment pulls him deeper into legal quagmire

Jan 11 2019 15:58
Ma Jie and Kae Inoue, Bloomberg

Carlos Ghosn’s chances of getting out of jail anytime soon took a serious blow on Friday after he was indicted for a second time by Japanese prosecutors building their case against the fallen car executive, who was detained almost two months ago.

The ousted Nissan Chairman was indicted Friday for acts including temporarily transferring personal trading losses to Nissan in 2008, as well as for understating his compensation for three years through March 2018.

Last month, he was indicted for under-reporting his income for an earlier period. His lawyers applied for bail, while acknowledging the slim chance of success.

The latest legal twist pulls Ghosn deeper into the Japanese criminal system, which grants authorities sweeping powers to keep suspects locked up for an extended period.

The time behind bars has already taken its toll on Ghosn. He appeared in public for the first time on January 8 looking gray and gaunt, and was led into a court room handcuffed and with a rope tied around his waist.

Concerned Wife

Ghosn’s wife, Carole, painted a glum picture of her husband’s state, saying she’s fearful for his health and that he’s been denied access to his family since the November 19 arrest in Tokyo.

Ghosn is being held in a cell with a toilet and a wash basin. His lawyers said Tuesday that he’s been granted a bigger room and what they called western-style bed.

It’s not uncommon in Japan for suspects to endure lengthy pre-trial detentions. Suspects are often re-arrested on suspicion of new charges periodically to keep them in custody while prosecutors attempt to build a case, and bail is the exception more than the rule.

On Tuesday, Ghosn’s lawyers said their client might remain behind bars until a trial begins, which may not happen for another six months.

Prosecutors said Friday that Ghosn’s detention could last for another two months.

Multiple passports

Ghosn holds French, Lebanese and Brazilian passports and his children live in the US, his wife said that her husband is living in "harsh conditions" and enduring "unfair treatment," and that authorities have not let the family speak with medical personnel at the detention center.

Lawyers said on Thursday, January 10, the executive had developed a fever, which has subsided since. A doctor was tending to Ghosn, who has been worn down by the long detention and interrogations.

In his court appearance, Ghosn gave a forceful rebuttal to the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are merit-less.

An indictment in Japan allows prosecutors to lay formal charges, a step that takes them close to trial. Since Ghosn’s initial arrest, prosecutors have repeatedly extended his detention and re-arrested him over new allegations.

Lack of clarity

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 UK 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.

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 $635 000 (over R8m) on December 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.

The arrest of the high-flying executive 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.

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.

Nissan’s board removed Ghosn from the post of chairman on November 22, 2018 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 met Thursday and confirmed compensation paid to directors in the past two years complied with law, while making no decision on Ghosn’s role at the carmaker.

renault  |  nissan  |  carlos ghosn  |  automaker  |  court
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