Ex-Nissan chief Ghosn charged, served with fresh arrest warrant

Published December 10, 2018
In this file photograph taken on November 8, 2018, Chairman and CEO of Renault-Nissan-Mitsubishi Carlos Ghosn looks on during a visit of the French President to a Renault factory at Maubeuge, northern France. — AFP
In this file photograph taken on November 8, 2018, Chairman and CEO of Renault-Nissan-Mitsubishi Carlos Ghosn looks on during a visit of the French President to a Renault factory at Maubeuge, northern France. — AFP

Japanese prosecutors formally charged Carlos Ghosn with financial misconduct for under-reporting his salary and also served a fresh warrant on separate allegations, local media reported on Monday, meaning the tycoon will likely spend Christmas in a cell.

Former Nissan chairman Ghosn, 64, has been in detention since his Nov 19 arrest on suspicion of under-declaring his income by some five billion yen between 2010 and 2015.

Authorities then re-arrested him later on Monday over separate allegations that he also under-reported his income by a further four billion over the past three years.

Under Japanese law, suspects can be re-arrested several times for different allegations, allowing prosecutors to question them for prolonged periods, a system that has drawn criticism internationally.

Monday was the final day prosecutors could hold Ghosn and close aide Greg Kelly before either charging or re-arresting them, and a further arrest could allow them another 22 days of questioning.

In addition to charges against Ghosn, prosecutors also indicted Kelly and Nissan itself, according to local media, as the company submitted the official documents that under-reported the income.

Ghosn denies the charges and is in a “combative” frame of mind, according to sources at Renault, the company he still formally leads, even if the French car giant has appointed an interim chairman.

The Japanese firms in the three-way alliance with Renault — Nissan and Mitsubishi Motors — have both sacked the Franco-Lebanese-Brazilian as chairman.

Lebanese phoenix

The millionaire auto sector star, who attracted some criticism for a perceived lavish lifestyle, is now alone in a spartan cell in a Tokyo detention centre, in a tiny room measuring just three tatami mats, around five square metres.

He has reportedly told embassy visitors he is being well treated but has complained of the cold, with Monday's temperature in the Japanese capital hovering around five degrees Celsius.

He spends his time reading books and news reports and is said to be unhappy about the rice-based food.

According to local news agency Kyodo, he has admitted signing documents to defer part of his salary until after retirement but said this amount did not need to be declared as it has not yet been definitively fixed.

A source close to the investigation has said Ghosn and Kelly allegedly put the system in place after a new law came in obliging the highest-paid members of the firm to declare their salary.

Ghosn is suspected of deferring part of his pay to avoid criticism from staff and shareholders that his salary was too generous.

Nissan is appealing to a court in Rio de Janeiro to block access by Ghosn's representatives to a luxury apartment on Copacabana Beach.

“We are closely watching if he is actually indicted and then found guilty,” said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm.

“If he is exempted from prosecution or found innocent, it is going to create huge confusion in Nissan's management,” Takada told AFP.

It is unclear if Ghosn can be bailed before a potential trial.

In Japan, prosecutors and defendants begin a trial at a district court and can appeal to a high court and the Supreme Court. It may take several years before reaching a final judgement.

If found guilty, Ghosn could face a 10-year prison sentence.

The affair represents a staggering turnaround for a figure celebrated for saving Nissan from the brink of bankruptcy and rebuilding it as a money-making subsidiary of Renault.

Nissan has begun the process of choosing Ghosn's successor, with the final decision expected on Dec 17.

His arrest has sparked incredulity at Renault, which owns 43 per cent of Nissan and says it has not seen a detailed account of the charges against Ghosn.

It has also fuelled anger in Lebanon, with digital billboards around Beirut proclaiming “We are all Carlos Ghosn” under a picture of the magnate.

“A Lebanese phoenix will not be scorched by a Japanese sun,” Interior Minister Nohad Machnouk has declared.

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