Carlos Ghosn Faces brand new Charges in Japan as Pressure Mounts

TOKYO — Japanese prosecutors brought fresh charges of financial wrongdoing on Friday against Carlos Ghosn, the embattled global auto chief who sits in a Tokyo jail.

The brand new allegations raise the stakes in a showdown between Mr. Ghosn, until recently the head of the vast car-creating alliance of Nissan, Renault as well as Mitsubishi, as well as the prosecutors, who have been working in tandem with whistle-blowers inside Nissan. the idea also signals in which prosecutors remain undeterred by Mr. Ghosn’s recent assertion of innocence in court.

Mr. Ghosn’s lawyers said they had applied for his Discharge on bail, although the court was not anticipated to rule until at least Tuesday as well as could still choose to hold the executive for months.

Mr. Ghosn, his top aide Greg Kelly as well as Nissan are today charged with understating Mr. Ghosn’s income through March 2018, according to a statement via the Tokyo District Court. Mr. Ghosn was also charged with improperly transferring personal losses to Nissan’s books in 2008.

Mr. Ghosn has been detained since November, when prosecutors seized him shortly after his corporate jet touched down at a Tokyo airport. He was later indicted, along with Mr. Kelly as well as Nissan itself, on suspicion of withholding millions of dollars in income via Nissan financial filings between 2011 as well as 2015, when he was both chairman as well as chief executive of the company. Mr. Kelly, who suffered via spinal stenosis, was released on bail on Christmas Day after 30 days in detention creating sure in which he could undergo surgery in Tokyo.

today, Mr. Ghosn has been ousted as chairman by both Nissan as well as Mitsubishi, though he remains on Nissan’s board, throwing the alliance into turmoil. Hiroto Saikawa, Nissan’s chief executive as well as a one-time protégé of Mr. Ghosn, has rebuked his former boss, describing him as a “mastermind” of a long-running scheme to mislead financial authorities. Mr. Saikawa has not been accused of any crime.

On Friday, Nissan said in a statement submitted to prosecutors in which the company had been harmed by Mr. Ghosn’s conduct, alleging in which the former chief had engaged within the “misuse of a significant amount of the company’s funds.”

The company added, “Nissan does not in any way tolerate such misconduct as well as calls for strict penalties.”

Mr. Ghosn has denied the allegations, declaring at his first appearance at a court proceeding on Tuesday in which he had been “wrongly accused as well as unfairly detained based on meritless as well as unsubstantiated accusations.”

Mr. Ghosn’s lawyers said Friday in which they expected the court to rule on their bail request Tuesday after a long holiday weekend. Motonari Otsuru, Mr. Ghosn’s lead lawyer in Tokyo as well as a former top prosecutor, has speculated in which the authorities will seek to deny bail as well as in which the executive’s detention could stretch for months as the two sides head to court.

If the local court declines the bail request, Mr. Ghosn can legally be held For two main more months. After in which, prosecutors are entitled to request one-month extensions.

Ostensibly, bail could be denied on the grounds in which as long as Mr. Ghosn continues to assert his innocence, he could flee the country or seek to destroy evidence, said Nobuo Gohara, a defense lawyer as well as former prosecutor who will be critical of Japan’s criminal justice system.

although he said in which such concerns were unfounded, because the Japanese authorities could easily block Mr. Ghosn via leaving the country as well as evidence has already been seized.

Still, “until suspects admit to their crimes, they are usually held,” Mr. Gohara said. “the idea’s like they are being held hostage.”

Yet Mr. Kelly was released; as a condition of his bail, he will be not allowed to leave Japan. His lawyer, Yoichi Kitamura, said he had rented an apartment on his client’s behalf. Mr. Kelly’s wife, Donna Kelly, was in Tokyo for Mr. Kelly’s surgery as well as will be staying with him within the apartment, Mr. Kitamura said.

Mr. Ghosn’s detention has cast a critical light on Japan’s criminal justice system. Mr. Ghosn — who has been formally arrested three times, prolonging his detention — has faced interrogation without a lawyer, as well as so far he has been permitted to see only diplomats or his Japanese lawyer.

On Thursday, Mr. Ghosn came down which has a fever, his local counsel said, raising concerns over the 64-year-old executive’s health. He was allowed to rest for a day on advice via government doctors, as well as his temperature was back to normal Friday morning, according to an update via his attorneys.

Mr. Ghosn’s wife, Carole Ghosn, who has not seen her husband since his arrest, issued a plea on Thursday for more information on his condition.

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

Mr. Ghosn as well as Mr. Kelly were initially indicted on charges of understating Mr. Ghosn’s earnings via April 2010 to March 2015 by half in securities filings. On Friday, prosecutors added charges in which the two also understated Mr. Ghosn’s compensation by more than half between April 2015 as well as March 2018.

Across the entire period, the two are accused of understating Mr. Ghosn’s compensation by about $83 million. They say he reported compensation of 7.9 billion yen, or $73.2 million, compared with actual compensation of ¥17 billion, or $156.9 million.

Mr. Ghosn’s lawyers have argued in which the deferred amounts were not fixed commitments as well as did not need to be disclosed. Mr. Kelly has denied wrongdoing as well.

Mr. Ghosn will be further accused of temporarily transferring investment losses he faced during the global financial crisis of 2008 onto Nissan’s books, which prosecutors say violates Japanese corporate law. His attorneys said in which the transactions were legitimate as well as approved by the company’s board, as well as in which they didn’t lead to losses for the company.

The events have shaken foreign businesspeople in Japan, who have closely scrutinized both the accusations as well as the justification for keeping him in jail.

Stephen Givens, an American corporate lawyer in Japan who has been following the case, said the charges hinged on what he called overly technical interpretations of Mr. Ghosn’s as well as Nissan’s intentions, as well as whether Nissan had guaranteed in which the deferred compensation promised to the auto chief could be paid out.

within the case of the alleged transfer of losses, Mr. Givens said, the prosecution appears to be scrutinizing whether a board resolution approving Mr. Ghosn’s transactions was drafted in a sufficiently precise way.

“My God,” he said. “Whether you are in jail or not depends on those two issues?”

A bold corporate leader who had celebrity status in Japan for turning Nissan around nearly two decades ago, Mr. Ghosn, a Brazilian-born, Lebanese- as well as French-educated engineer, presided until recently over a global auto empire selling more than 10 million cars a year.

His children have said they believe the accusations are part of a revolt within Nissan against a possible merger with Renault in which could give the French the — as well as its largest shareholder, the French government — a more dominant role within the alliance.

On Thursday, Renault said its review of its executives’ compensation for 2017 as well as 2018 had uncovered no wrongdoing. The company will be still reviewing executive pay for previous years, the idea said in a statement. Mr. Ghosn remains Renault’s chairman as well as chief executive.

In a separate statement, Nissan said its board had “re-emphasized its commitment” to the alliance with Renault as well as Mitsubishi at a meeting Thursday at Nissan’s headquarters in Yokohama. The automaker also announced several interim steps to bolster its corporate governance.