UPDATE3: Tokyo prosecutors indict ex-Nissan boss Ghosn on fresh charges

Japan Economic Newswire |

Tokyo prosecutors charged former Nissan Motor Co. Chairman Carlos Ghosn with two additional counts of financial misconduct Friday, in a further blow to an auto industry executive who has remained in detention since his arrest in November.

Ghosn's lawyers requested bail at the Tokyo District Court following the indictment. But his chief lawyer has previously been pessimistic about the 64-year-old being released anytime soon from a detention center in the capital, citing the complexity of a case involving documents in both Japanese and English.

Ghosn was charged with aggravated breach of trust in relation to the alleged transfer of private investment losses to Nissan amid the 2008 global financial crisis and understating his remuneration in the three fiscal years through March last year.

Ghosn, credited with saving Nissan when it was teetering on the brink of bankruptcy in the late 1990s, has denied all of the allegations, including an initial accusation that he underreported his remuneration in Nissan's securities reports presented to Japanese regulators during a five-year period from fiscal 2010.

The new charges came only days after Ghosn appeared at a Tokyo court seeking an explanation for his prolonged detention and declared his innocence. The open hearing on Tuesday, which drew worldwide attention, was his first public appearance since his arrest in November.

The prosecutors also indicted former Nissan representative director Greg Kelly and Nissan as company for the alleged misstatement of Ghosn's remuneration on Friday.

Nissan, also indicted for the second time following a charge related to the underreporting of the former chairman's remuneration over the separate five-year period, said in a press release that it "takes this situation seriously and expresses its deepest regret for any concern caused to its stakeholders."

The Japanese automaker also said it has filed a criminal complaint against Ghosn with the prosecutors based on the same charge of breach of trust.

Ghosn has remained in custody at the Tokyo Detention House since prosecutors arrested him on for allegedly understating his remuneration in Nissan's securities reports. The sum of remuneration that was allegedly underreported from fiscal 2010 totals around 9.1 billion yen ($83 million).

He was served with a fresh arrest warrant on for allegedly shifting a private currency swap contract with losses worth 1.85 billion yen to Nissan in and causing damage to the company by having it pay $14.7 million to a Saudi businessman, who guaranteed credit for Ghosn, in the following years.

Ghosn has admitted that the ownership of the contract was temporarily transferred from his private asset management firm to Nissan but said the automaker incurred no losses. The contract was transferred back to the management firm in after the Saudi businessman, Khaled Al-Juffali guaranteed credit.

Ghosn has said that the payments to Al-Juffali through a Nissan subsidiary were proper compensation for him taking care of difficult business problems in the Middle East.

The prosecutors believe Ghosn committed an aggravated breach of trust the moment he transferred the contract to Nissan.

An individual convicted of aggravated breach of trust faces a fine of up to 10 million yen and/or a maximum prison term of 10 years. A violation of the financial instruments law by understating remuneration carries the same penalty for an individual, while a company faces a fine of up to 700 million yen.

The arrest and detention of Ghosn, who remains CEO and chairman of Nissan's capital alliance partner Renault SA, has sparked international criticism of Japan's justice system, which effectively allows a suspect to be held indefinitely and questioned without a lawyer present.

Friday marked the last day of Ghosn's detention period approved by the Tokyo District Court and prosecutors had to decide whether to indict or release him.

Ghosn's close aide Kelly, 62, who was arrested along with Ghosn for allegedly understating remuneration, has already been released on bail.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer



Symbol Last Price Change % Change










World Economic Forum at Davos 2019 - Dr Oliver Krause Founder Untitled Inc Part 1

Matt Bird sits down with Dr Oliver Krause, Founder Untitled Inc, in part 1 of this 2 part interview at the World Economic Forum at Davos 2019