Ghosn stays locked up after being charged for alleged breach of trust

Nissan’s former chairman Carlos Ghosn was charged on Friday with breach of trust, according to the Tokyo District Court, making his release unlikely for months.

Ghosn, arrested on Nov 19, was earlier charged with falsifying financial reports in underreporting his income by about 5 billion yen ($44 million) over five years up to 2015.

Ghosn; Greg Kelly, another Nissan executive; and Nissan as a legal entity were charged on Friday with additional underreporting of income, from 2015 to mid-2018.

Ghosn’s lawyer, Motonari Ohtsuru, filed a request that Ghosn be released on bail. His detention for the breach of trust allegations would have expired on Friday if charges had not been filed.

Kelly and Nissan were not charged with breach of trust. Those allegations center on Ghosn’s handling of investment losses and payments made to a Saudi businessman. Ghosn, 64, claims he’s innocent.

Suspects in Japan are often held for months until trials start and Tokyo prosecutors maintain that Ghosn, a Brazilian-born Frenchman of Lebanese ancestry, is a flight risk.

Earlier this week, in his first public appearance since his arrest, Ghosn told a court he was innocent and appealed for his detention to end. But the court rejected the request.

“I have a genuine love and appreciation for Nissan,” Ghosn told the court. “In all of my efforts on behalf of the company, I have acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company.”

He said his compensation was never decided upon, the investment deal never resulted in any losses to Nissan and the payments to the Saudi businessman were for legitimate services related to dealers and investments in the Gulf.

Ghosn remains CEO of Nissan’s alliance partner Renault, though he was dismissed as chairman of Nissan and fellow alliance company Mitsubishi Motor Co.

Renault has stuck by Ghosn since his arrest but faces pressure to find a successor as his detention drags on and questions mount about executive payment schemes used by the carmaker and related companies.

Renault’s board of directors held a special meeting on Thursday night over internal reviews of executive pay prompted by Ghosn’s arrest. It declared that no fraud was found in 2017-18 but it is examining earlier years. Its shares fell slightly on Friday morning after those announcements.

Ghosn, who appeared much thinner than before his arrest, caught a fever the day after his court appearance, but has since recovered, Ohtsuru said.

His wife, Carole, issued a statement overnight from Paris, expressing concern over his sickness.

“I am pleading with the Japanese authorities to provide us with any information at all about my husband’s health. We are fearful and very worried his recovery will be complicated while he continues to endure such harsh conditions and unfair treatment,” she said.

Apart from prosecutors, only embassy officials and Ghosn’s lawyers are allowed to visit him. Such visits were canceled on Thursday but resumed on Friday.

While declining to comment on specifics, Deputy Chief Prosecutor Shin Kukimoto told reporters that indicted suspects are usually detained for several months.

“We believe that there was enough to charge and go to trial,” he said of Ghosn’s case, “and he will be guilty.”

Ghosn has been interrogated daily but now will only be questioned with his consent, Kukimoto said.

The maximum penalty for the falsifying of financial reports and breach of trust is 15 years in prison, a 10 million yen fine, or both.

The breach of trust charge alleges that 1.8 billion yen in damage was caused to Nissan through transactions made by Ghosn, and that $14.7 million was paid to the Saudi businessman.

The other new charge says Ghosn reported 2.9 billion yen in compensation, when he earned more than 7.1 billion yen in the three years ending in June 2018.

Before his sudden arrest, Ghosn was a respected figure in the global auto industry, having rescued the Japanese automaker from nearbankruptcy, building its sales operations and profits and pioneering ecological vehicles.

Nissan says an internal investigation began in mid-2018 after whistleblowers came forward. Nissan Chief Executive Hiroto Saikawa has denounced Ghosn, accusing him of using the company’s money and assets for personal gain.

In a statement the company said that it took the latest charge seriously and was strengthening its rules. “Nissan filed the criminal complaint on the basis of Ghosn’s misuse of a significant amount of the company’s funds. Nissan does not in any way tolerate such misconduct and calls for strict penalties,” it said.