Former Nissan Motor Co. Chairman Carlos Ghosn rejected prosecutors’ claims of financial wrongdoing and pledged his loyalty to the company he led for more than a decade, as the fallen car titan faces an extended detention following his shock arrest in Japan almost two months ago.
“I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations,” said Ghosn, who arrived gaunt, handcuffed and with a rope around his waist in a Tokyo court room, his first public appearance since he was detained on Nov. 19. Ghosn’s lawyers said later they plan to appeal his incarceration and will apply for bail if he is indicted on Jan. 11, the end of the current detention period.
Looking thinner and with sunken cheeks, the dark-suited Ghosn laid out in detail his defense against charges he failed to disclose income from Nissan and passed on trading losses to the carmaker. He told the court that contrary to accusations made by prosecutors, he got no compensation from Nissan that wasn’t disclosed.
Ghosn has been indicted in Japan for under-reporting his compensation and the hearing Tuesday was requested by his lawyers, seeking an explanation for why he has been detained for so long. According to his defense team, he faces the prospect of not getting bail until a trial begins, which might take six months, meaning Ghosn would spend far longer in detention than the 50 days he’s already been locked away.
“I have acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company,” Ghosn said. “Your Honor, I am innocent of the accusations made against me.” A statement of the remarks he made in court was provided to Bloomberg News.
Once feted as Nissan’s savior, Ghosn presented a pale imitation of his old self. The jet-setting manager, who once came to symbolize the Davos Man, appeared to have lost significant weight and his hair was graying at the roots. His business shoes had been replaced by plastic slippers. He was initially held without charge for longer than would be permitted in the U.K. for a suspected terrorist.
Here are Ghosn’s key points:
The charges are related to a relatively arcane point of accounting -- whether retirement payments were properly booked. Ghosn said draft proposals for his post-retirement compensation were reviewed by internal and external lawyers at Nissan, showing he had no intention of breaking the law. Another allegation is that Ghosn transferred obligations on his own personal investment losses to Nissan. In his defense, he said he had asked Nissan to take on collateral linked to foreign-exchange forward contracts “as it came to no cost to the company.” The contracts, which were transferred back to him without the carmaker incurring any loss, were struck because the company paid him in yen while he preferred income in U.S. dollars. The executive said he always acted with integrity and has never been accused of any wrongdoing in his professional career.
After weeks in jail, the executive’s public defense was highly anticipated: A whopping 1,122 tickets were handed out Tuesday in a lottery to attend Ghosn’s hearing -- about 80 times oversubscribed -- for the 14 public seats available in the courtroom gallery.
His appearance in court lends a new dimension to a legal battle that has been largely one-sided. Accusations against him have layered up and his confinement has repeatedly been extended. He was re-arrested on fresh charges on Dec. 21, just when it looked like he may be able to apply for bail.
Judge Yuichi Tada said Tuesday that Ghosn, as someone with multiple bases overseas, is being held because there’s a risk he’ll leave the country and tamper with evidence. Ghosn’s legal team argued there’s no chance of that, partly because he’s well known as the Renault boss.
While he was dismissed as Nissan chairman shortly after his detention, Renault has kept him on as chairman and chief executive officer because it needs evidence of wrongdoing. On Tuesday, French Labor Minister Muriel Penicaud said in a CNews television interview that presumption of innocence must be respected and Ghosn remains the head of Renault.
“If and only if he were blocked lastingly would we draw conclusions. But we aren’t there today,” French Finance Minister Bruno Le Maire said on Sunday, saying he had "nothing in hand" that would call for a demand for Ghosn’s departure.
In his remarks, Ghosn also sought to highlight his loyalty to Nissan and he spoke of “a genuine love and appreciation” for the company. But his former employer said its own probe was widening. The Japanese automaker uncovered substantial and convincing evidence of misconduct and the board unanimously voted to oust Ghosn, Nissan said in a statement. “Our investigation is ongoing, and its scope continues to broaden,” the company said.
When asked about speculation that Ghosn’s detention and removal was part of a coup by forces within Nissan aimed at staving off a potential merger of the carmakers, Ghosn’s lawyer Motonari Otsuru declined to comment.
Ghosn said four major companies tried to recruit him while he was Nissan CEO. He even named some of the people who reached out to him -- Bill Ford at Ford Motor Co., and Steve Rattner, the Obama administration’s car czar at the time, who tapped Ghosn for a position at General Motors Co.
The disgraced executive said he turned them all down. "Even though their proposals were very attractive, I could not in good conscience abandon Nissan while we were in the midst of our turnaround," he said in Tuesday’s statement.
Meanwhile, a Saudi partner of Nissan came to the defense of Ghosn after a $14.7 million payment to the Middle Eastern company came under the scrutiny of prosecutors in the probe. The transaction over four years was for legitimate business purposes, the firm said.
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 and Lisa Du