Ghosn faces months in Tokyo jail as another bid for bail is rejected

The judge at a Jan 8 hearing says Ghosn’s continued detention is due to flight risk and the risk of witness or evidence tampering

By BLOOMBERG

TOKYO • Carlos Ghosn’s latest bid to be released on bail was rejected by a Tokyo court, leaving the fallen car titan behind bars for at least another two months as prosecutors continue to build their case against him for financial crimes.

Ghosn’s lawyers had submitted the bail application last week after the former Nissan Motor Co Ltd chairman was indicted for a second time, over allegations he transferred personal trading losses to the carmaker.

Prosecutors have said his current period of detention lasts until March 10, but Ghosn’s chief lawyer, Motonari Otsuru, flagged last week that the executive could remain behind bars until his trial, which could be six months away.

Yesterday’s court decision is a win for the Japanese prosecutors pursuing Ghosn, who want to keep questioning him as they firm up their case ahead of an eventual trial. Ghosn’s lawyers said yesterday they plan to appeal the decision.

Arrested on Nov 19 at a Tokyo airport, the car-industry legend has also been indicted for understating his income at Nissan by tens of millions of dollars. Ghosn’s downfall has rocked the world’s biggest auto alliance, with alleged misdeeds unearthed by the Japanese carmaker but kept from their French partner Renault SA forming the basis for the prosecutors’ case. While Nissan dismissed Ghosn as chairman shortly after his arrest, Renault has retained him as chairman and CEO, saying it needs more evidence of his wrongdoing.

Health Fears
The time behind bars has already taken its toll on Ghosn. A citizen of three nations who travelled frequently between the alliance’s offices around the world, he appeared in public for the first time on Jan 8 looking grey and gaunt, and was led into a court room handcuffed and with a rope tied around his waist. Ghosn’s wife, Carole, said this month that she fears for his health and that he’s been denied access to his family since the arrest.

It’s not uncommon in Japan for suspects to endure lengthy pre-trial detentions. Suspects are often re-arrested on suspicion of new charges periodically to keep them in custody while prosecutors attempt to build a case, and bail is the exception more than the rule.

Legal experts say this is all a strategy to secure a confession and make a trial easier. In Ghosn’s case, the judge at a Jan 8 hearing said his continued detention was due to flight risk and the risk of witness or evidence tampering.

Losing Weight
Ghosn holds French, Lebanese and Brazilian passports and his children live in the US. His wife said her husband is living in “harsh” conditions and enduring “unfair treatment”, and that authorities have not let the family speak with medical personnel at the detention centre. He’s lost almost 7kg, she said.

In his court appearance, Ghosn gave a forceful rebuttal to the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are meritless. An indictment in Japan allows prosecutors to lay formal charges, a step that takes them close to trial. Since Ghosn’s initial arrest, prosecutors have repeatedly extended his detention and re-arrested him over new allegations.

Japan’s prosecutors have faced criticism for a lack of clarity and communication on how they are handling the case, with Ghosn held in detention without charge for longer than would be permitted in the UK for a suspected terrorist. If and when Ghosn will be out on bail, his movements are likely to be restricted to his home or a hotel, and he’ll need a court permission to leave the country, legal experts have said.

10 Years
If proven, each of Ghosn’s alleged offence 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. The prosecutors haven’t officially charged him over these allegations.

At the court, Ghosn said his actions were backed by managers inside the company as well as external lawyers.

For example, his retirement payments were reviewed by legal experts inside Nissan as well as independent lawyers, and showed no intention of breaking the law. Another accusation — that he rolled personal investment losses onto Nissan — came at no cost to the company, Ghosn said. All told, Ghosn said he always acted with integrity and had never been accused of any wrongdoing in his professional career.

Ghosn has been widely credited with saving Nissan from failure in the late 1990s and bringing it together with Renault. 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.

Nissan’s board removed Ghosn from the post of chairman on Nov 22.

Renault, which is the biggest shareholder in Nissan, has refrained from removing Ghosn, instead appointing interim replacements. Renault’s most powerful shareholder, the French state, said Ghosn is presumed innocent until proven guilty and has demanded Nissan share the evidence it’s collated against him.

Nissan CEO Hiroto Saikawa said Renault should reach the same conclusion as the Japanese automaker, and oust Ghosn if and when it gains access to all the relevant information, according to an interview with French daily Les Echos published on Monday.