Sat, Dec 22, 2018 - Page 10 News List

Ghosn re-arrested while still in prison

‘BREACH OF TRUST’:Law professor Colin Jones said that the new charge against the former Nissan executive was serious, more than just typical corporate malfeasance

Bloomberg

Japanese prosecutors re-arrested former Nissan Motor Co chairman Carlos Ghosn on fresh, more serious allegations of financial misconduct, dealing a blow to the automaker’s efforts to end his month-long stay in jail and seek bail.

Prosecutors yesterday said that Ghosn is suspected of inflicting financial damage to Nissan from his own unprofitable investments.

The new arrest gives prosecutors the right to detain Ghosn for at least a further 10 days and possibly longer, while potentially hurting his chances of getting bail after that.

Ghosn’s lawyers declined to comment.

While the charges against Ghosn had thus far been related to a relatively arcane point of accounting — whether retirement payments were properly booked — the new accusations are for a misdeed that has an actual victim: Nissan.

The allegations are now more aligned with those of Nissan, which has accused Ghosn of misusing company assets and ousted him as chairman quickly after his arrest.

“It’s a very serious charge,” said Colin Jones, a professor of law at Doshisha University in Kyoto. “If there was a conviction, I think it would mean that there’s been a judgement that it’s more than just typical self-dealing corporate malfeasance, but something that really harmed the company and was particular malevolent in terms of the amount of planning that went into it.”

Ghosn was originally arrested on Nov. 19 at Tokyo’s Haneda airport. He and Nissan were indicted on Dec. 10 for falsifying securities reports that under-reported his income by tens of millions of US dollars.

Ghosn has denied wrongdoing.

The new arrest warrant states that Ghosn conducted an “aggravated breach of trust” by allegedly transferring obligations on his own investment losses worth about ¥1.85 billion (US$16.6 million) to Nissan, inflicting financial damage on the automaker.

The new allegations would be in violation of Japan’s Companies Act and is seen as a more serious charge than under-reporting income, part of the Japanese Financial Instruments and Exchange Act.

The Companies Act states that such a charge carries a maximum prison sentence of 10 years.

Ghosn has been widely credited with saving Nissan from failure and bringing it together with Renault SA to create a formidable auto union. His arrest came after a months-long investigation by Nissan into his conduct and compensation that was largely kept from its French partner.

Nissan chief executive officer Hiroto Saikawa — a one-time protege of Ghosn — has emerged as a driving force in the automaker’s investigation into the alleged wrongdoing by Ghosn and his aide Greg Kelly, who is also indicted in the case.

The arrests were the result of a coup by executives, including Saikawa, Kelly’s wife, Dee Kelly, said in a video released on Wednesday.

Saikawa was asked by reporters on the day Ghosn and Kelly were arrested whether a coup was under way at Nissan.

He replied: “That is not my understanding. I didn’t make such an explanation and think you should not think of it that way.”

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