Nissan, ex-chairman indicted
Ghosn served with fresh arrest warrant
TOKYO: Japanese prosecutors yesterday formally charged Carlos Ghosn with financial misconduct for under-reporting his salary and also served him a fresh warrant on separate allegations, meaning the tycoon will likely spend Christmas in a cell.
It represents a stunning turnaround for the 64-year-old Franco-Lebanese-Brazilian executive, a once-revered colossus of the auto sector who won wide acclaim in Japan for saving car giant Nissan Motor Co.
In a move that sent shockwaves through the business world, the former Nissan chairman was arrested on November 19 on suspicion of under-declaring his income by some five billion yen ($44 million) between 2010 and 2015.
Prosecutors yesterday pressed formal charges on Ghosn — and key aide Greg Kelly — over this allegation, which both men are said to deny.
The pair were also immediately rearrested over fresh allegations that they conspired to under-declare Ghosn’s income by a further four billion yen over the past three years.
Under Japanese law, suspects can be re-arrested several times for different allegations, allowing prosecutors to question them for prolonged periods — a system that has drawn criticism internationally.
Yesterday was the final day prosecutors could hold Ghosn and Kelly, 62, before either charging or re-arresting them, and the fresh arrest gives them up to another 22 days of questioning.
In addition to charges against Ghosn and Kelly, prosecutors also indicted Nissan itself, as the company submitted the official documents that under-reported the income.
Nissan shares dropped 2.90% to 945 yen and the firm voiced “its deepest regret” over the affair.
The manufacturer said it would “continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information”.
The Japanese firms in the three-way alliance with Renault SA — Nissan and Mitsubishi Motors Corp — have both sacked Ghosn as chairman.
But amid reports of tension within the tie-up, which outsold all rival groups last year, the three companies last month said they were “fully committed” to the alliance.
The millionaire auto sector star, who attracted some criticism for a perceived lavish lifestyle, is now alone in a spartan cell in a Tokyo detention centre, in a tiny room measuring just three tatami mats — around five square metres.
He has reportedly told embassy visitors he is being well treated but has complained of the cold, with yesterday’s temperature in the Japanese capital hovering around five degrees Celsius.
He spends his time reading books and news reports and is said to be unhappy about the rice-based food.
But he is in a “combative” frame of mind, according to sources at Renault, the company he still formally leads — even if the French car giant has appointed an interim chairman.
According to local news agency Kyodo, he has admitted signing documents to defer part of his salary until after retirement but said this amount did not need to be declared as it has not yet been definitively fixed.
A source close to the investigation has said Ghosn and Kelly allegedly put the system in place after a new law came in obliging the highest-paid members of the firm to declare their salary.
Ghosn is suspected of deferring part of his pay to avoid criticism from staff and shareholders that his salary was too generous.
Nissan is appealing to a court in Rio de Janeiro to block access by Ghosn’s representatives to a luxury apartment on Copacabana Beach.
“We are closely watching if he is actually indicted and then found guilty,” said Satoru Takada, an analyst at TIW, a Tokyobased research and consulting firm. “If he is exempted from prosecution or found innocent, it is going to create huge confusion in Nissan’s management.”
It is unclear if Ghosn will be bailed before a potential trial.
In Japan, prosecutors and defendants begin a trial at a district court and can appeal to a high court and the Supreme Court. It may take several years before reaching a final judgement.
If found guilty, Ghosn could face a 10-year prison sentence.
Shortly after Ghosn’s indictment, Prime Minister Shinzo Abe reiterated the need to maintain the Renault-Nissan-Mitsubishi alliance, calling it “a symbol of JapanFrance industrial cooperation”.
“I expect that the parties involved will hold constructive discussions among them,” he said. “I am certain that (JapanFrench relations) would not be shaken by incidents such as this one.”