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Industryweek 12196 Carlos Ghosn G

Ghosn to Get a Day in Court Almost Two Months After Shock Arrest

Jan. 4, 2019
His lawyers have asked for explanation on why he is being held.

Carlos Ghosn will finally see the inside of a Japanese court room next week, almost two months after his arrest on financial crimes.

The embattled car titan will attend a hearing of the Tokyo district court on Jan. 8, according to his chief lawyer, Motonari Otsuru. The session was called after Ghosn’s legal team requested an explanation on why the former Nissan Motor Co. chairman -- who was taken into custody Nov. 19, and has had his detention extended repeatedly -- remains in jail.

While Ghosn has been indicted by Japanese prosecutors on allegations of under-reporting his compensation, the length of his detention and the lack of clarity provided on the case has drawn criticism.

The architect behind Nissan’s alliance with France’s Renault SA, Ghosn was initially held without charge for longer than would be permitted in the U.K. for a suspected terrorist. His arrest has rocked the world’s largest auto pact, amid speculation it was part of a coup by forces within Nissan aimed at staving off a merger of the carmakers.

The two-month saga has taken several twists and turns, with Ghosn re-arrested on fresh, potentially more serious charges Dec. 21 just when it looked like he may be able to apply for bail. Prosecutors have accused him of transferring personal trading losses to Nissan, but are yet to indict him on this allegation. In Japan, indictment paves the way for prosecutors to lay formal charges.

His detention was last extended Dec. 31, putting him behind bars until at least Jan. 11.

Nissan has also been indicted over under-reporting Ghosn’s income, while his former aide, Greg Kelly -- a former Nissan representative director -- was released on bail Dec. 25. He is alleged to have helped the car industry legend under-report his compensation from the carmaker by tens of millions of dollars. Both Ghosn and Kelly have denied the allegations through their lawyers.

Ghosn’s downfall has raised questions about the future of the decades-old alliance. While Nissan dismissed him as chairman shortly after his arrest, Renault retained Ghosn as chairman and chief executive officer, saying it needs evidence of his wrongdoing.

His arrest came after a months-long investigation by Nissan into his conduct, a probe that was largely kept from its French partner. That lack of transparency and concern that Nissan will use Ghosn’s absence to push for more power within the alliance has heightened tensions between the two automakers.

If proven, each of Ghosn’s alleged offenses may carry a sentence of as much as 10 years, prosecutors have said. Nissan has also accused Ghosn of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract.

By Kae Inoue

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