Tokyo court denies Ghosn’s request for release on bail
Former Nissan Motor chairman faces much-longer detention period if decision is upheld Carlos Ghosn is accused of abusing his executive position at Nissan for personal gain.
TOKYO— Carlos Ghosnis facing many more months in jail after losing a request for release on bail Tuesday, compounding concerns about the 64-yearold’s health and a Japanese legal system geared toward pressuring suspects into confessions.
The former Nissan Motor Co. chairman has spent nearly two months in jail since his surprise arrest Nov. 19. If Tuesday’s decision by the Tokyo District Court is upheld on appeal, Mr. Ghosn faces a much-longer detention period. His lawyer has said Mr. Ghosn could be required to stay in jail until his trial, which could take six months to a year to begin.
An official at Renault SA, where Mr. Ghosn remains chairman and chief executive, said the French auto maker would now face pressure to relieve him of those positions. “We’ve gone from a position where someone was temporarily indisposed to a position where this person is indisposed for the long term,” the Renault official said.
Mr. Ghosn has been charged with understating his compensation on eight years of Nissan financial reports and with causing Nissan to pay the company of a Saudi Arabian friend who helped him with a personal financial problem. The latest charges were filed Jan. 11 and cleared the way for Mr. Ghosn to seek his release on bail.
Mr. Ghosn says he is innocent. He says he kept a record at Nissan of how much he thought he was worth but describes it as a hypothetical calculation that didn’t bind Nissan to pay him anything beyond his publicly reported compensation. He says Nissan received valuable services from the Saudi company and paid it appropriately.
Since his arrest, Mr. Ghosn has lost enough weight that his cheeks appeared sunken at a hearing Jan. 8, his sole public appearance since his arrest. Mr. Ghosn’s family had a brief health scare later that week when Mr. Ghosn had a 102-degree fever, prompting a push from the family for information on his medical condition. The fever later receded, but family members remain concerned about his health.
Even after formal charges, Tokyo prosecutors can continue interrogating Mr. Ghosn if he consents to it. Those interrogations would take place without his lawyers present.
Mr. Ghosn’s lead lawyer, former prosecutor Motonari Otsuru, has said that during interrogations after his arrest, prosecutors presented documents that they said showed his guilt, in hopes of winning a confession. Defendants who admit to wrongdoing are often released on bail, while those who maintain their innocence are often held for lengthy periods.
After defendants in Japan are charged, they must be held for two months, barring any release on bail. After two months—March 10 in Mr. Ghosn’s case—a judge reviews the detention every month. The defense can request bail at any point, but defense lawyers often wait for new facts or a change in the case before approaching the court again.
Mr. Ghosn faces a charge of aggravated breach of trust, accused of abusing his executive position at Nissan for personal gain. The charge is related to Mr. Ghosn’s temporary transferal of a personal derivatives contract to Nissan in October 2008, which prosecutors say caused a loss for Nissan. When Mr. Ghosn took back the contract in February 2009, he did so with the assistance of a letter of credit arranged by a personal friend, Saudi Arabian businessman Khaled Al Juffali. Nissan made a series of four payments totaling $14.7 million to Mr. Juffali’s company from 2009 to 2012. Prosecutors believe those were for the personal benefit of Messrs. Ghosn and Juffali, not Nissan.
Mr. Otsuru, the defense lawyer, said people accused of aggravated breach of trust are rarely granted bail. It was that risk that led Mr. Ghosn’s legal team to call a news conference last week to criticize the prosecution, a rare step in Japan.
Mr. Otsuru accused prosecutors of rushing to judgment over the derivatives contract, saying they ignored an agreement that ensured any losses were borne by Mr. Ghosn. He also said they failed to seek Mr. Juffali’s testimony and, if they had, would have found the payments by Nissan were for concrete services performed by the Saudi businessman to assist Nissan’s struggling business in the region.
Nissan is still conducting its own probe into Mr. Ghosn’s financial dealings, and it is also providing information to prosecutors.
A person at Nissan familiar with that probe cited new evidence Tuesday that Mr. Ghosn had the company pay for luxury accessories at a house in Beirut purchased by Nissan for the executive’s use.
The existence of the house and multimillion-dollar renovations paid for by Nissan were already known. Nissan found that the house was purchased for $9.5 million in May 2012 and renovated at a cost of $7.2 million, said the person at Nissan familiar with the probe.
The Ghosn family believed the Beirut and other residences used by Mr. Ghosn were corporate housing whose purchase went through the normal channels for Nissan approval, a person familiar with the family has said.
In August 2017, Mr. Ghosn sent an email urging Nissan to transfer $1.5 million that he said was needed to pay contractors and interior decorators, according to a copy of the email reviewed by The Wall Street Journal.
Two months later, he sent another email saying contractors were complaining to him about late payment.
“In case we cannot solve whatever problem is at the origin of these delays, I am going to have to pay directly the vendors to avoid embarrassments and unwelcome gossips around the house,” Mr. Ghosn wrote in the email, also reviewed by the Journal.
That month, his wife, Carole, sent an email, reviewed by the Journal, in which she asked a person Nissan says is their employee in Beirut to pay a 65,000 euros ($74,000) invoice for two dining-room chandeliers.
The representative of the Ghosn family declined to comment.