While Ghosn’s picture worsens, ex-Nissan director sees hope
Lawyer hopes former executive Greg Kelly can be freed on bail as soon as Christmas
TOKYO— After weeks of being held at the same Tokyo jail and a pair of indictments, the fates of Carlos Ghosn and his former right-hand man at Nissan Motor Co., Greg Kelly, have begun to diverge.
Mr. Ghosn faces the possibility of new charges over suspicions that he temporarily pushed personal losses onto Nissan’s books. Mr. Kelly doesn’t, and his lawyer said there was a good chance he could be freed on bail as soon as Christmas Day. On Friday morning, Mr. Ghosn was potentially within hours of getting freed on bail after spending a month in jail with little contact with the outside world.
His lawyer had requested bail and was on his way to make his case at a closed session in Tokyo District Court.
Then, shortly before the hearing was set to start, prosecutors swooped in.
Their new suspicions focused on a 2008 swap transaction in which they say Mr. Ghosn temporarily pushed unrealized personal losses totaling ¥1.85 billion ($16.6 million (U.S.) at current rates) onto Nissan’s books. They also cited a series of transactions from 2009 to 2012 in which a person suspected of helping Mr. Ghosn get out of his financial mess was paid $14.7 million by a Nissan subsidiary.
Under Japanese law, suspects arrested by prosecutors can be detained up to 22 days without bail, if the court approves extensions midway. Further, while a suspect is behind bars, he or she can be “re-arrested,” leading to a reset of the detention clock. What happened to Mr. Ghosn Friday was a “re-re-arrest.”
It became necessary when the Tokyo District Court on Thursday—in an almost unheard-of move—rejected prosecutors’ request to extend the detention clock on the initial re-arrest, which had taken place Dec. 10.
Mr. Ghosn was re-re-arrested on suspicion of breach of trust, a criminal offense in Japan that means a corporate executive abused his or her position for personal gain.
He can be held without bail through Sunday, and for an additional 10 to 20 days beyond that if the court agrees.
At a news conference Friday, the deputy chief prosecutor in Tokyo, Shin Kukimoto was asked many questions about the new suspicions. What did the 2008 swap transaction involve?
If Mr. Ghosn took it back onto his personal books—as prosecutors acknowledge—how could he be accused of harming Nissan? Who was the person who helped Mr. Ghosn? Mr. Kukimoto declined to comment on all those points.
Both Messrs. Ghosn and Kelly have been formally charged over the matter that triggered their first arrest, on Nov. 19. That is the allegation that they conspired to hide some $44 million in Mr. Ghosn’s compensation from Nissan’s financial statements over a five-year period ended March 2015. Mr. Kelly was an executive at Nissan at the time.
Lawyers for both men have said they deny wrongdoing and believe they will be vindicated in court.
Mr. Kelly’s prospects for freedom look better than Mr. Ghosn’s. Mr. Kelly’s Japanese lawyer, Yoichi Kitamura, sought bail on Friday and said he was confident the court would grant it, although he said the proceedings would likely last until at least Tuesday. Monday is a national holiday in Japan. Japanese court hearings over bail and detention are generally closed.
It wasn’t known what conditions might be placed on Mr. Kelly’s release, but Mr. Kitamura said he expected the defendant would have to stay in Japan. Mr. Kelly’s wife has said he needs surgery for a back condition, and Mr. Kitamura said that would likely take place in Japan.
Mr. Kitamura said Mr. Kelly’s condition was “not very good” but jail officials allowed him to use a pillow that his wife, Dee, said was necessary to alleviate his pain while sleeping.