This courtroom sketch depicts former Nissan chairman Carlos Ghosn in a courtroom at the Tokyo District Court in Tokyo Tuesday, Jan 8, 2019. (NOBUTOSHI KATSUYAMA / KYODO NEWS / AP)
TOKYO — Defense lawyers for Nissan ex-Chairman Carlos Ghosn said they will seek his release on bail after Tokyo prosecutors indicted him on Friday on two new charges of financial misconduct.
The former executive - once lauded for rescuing a near-bankrupt Nissan - was charged with aggravated breach of trust for temporarily transferring personal investment losses to the automaker in 2008, and for understating his compensation for three years through March 2018, prosecutors said.
The charges were widely expected after Ghosn’s arrest for those allegations last month. Under Japanese law, suspects can be held for 23 days before being formally charged.
Prosecutors on Friday also indicted Nissan Motor Co Ltd and former Representative Director Greg Kelly for under-reporting Ghosn’s income for those three years. Kelly was arrested in November and released on bail on Christmas Day.
Ghosn, Kelly and Nissan have already been indicted for under-reporting Ghosn’s income for the five years through 2015.
In this photo taken on Jan 11, 2019, security officials stand guard in front of Tokyo Detention Center, where former Nissan chairman Carlos Ghosn is detained, in Tokyo. (EUGENE HOSHIKO / AP)
“This second indictment for Kelly comes as no surprise as it merely makes what was a five year period for the first into eight years,” said Kelly’s lawyer Yoichi Kitamura.
Kelly, who was hospitalized for treatment of a neck problem immediately after his release, cannot leave the country without special permission. He has denied the allegations.
Kitamura said he expects Ghosn and Kelly to be tried together on the two charges and that he will work closely with Ghosn’s legal team to prepare for the trial.
In a court hearing on Tuesday, Ghosn denied the allegations, calling them “meritless” and “unsubstantiated”.
Ghosn in court said he had asked Nissan to temporarily take on his foreign exchange contracts after the 2008-2009 financial crisis prompted his bank to call for more collateral. He said he did this to avoid having to resign and use his retirement allowance for collateral.
Motonari Otsuru, the head of Ghosn’s legal team, said on Tuesday that Nissan had agreed to the arrangement on condition that any losses or gains would be Ghosn’s. Ghosn said the contracts were transferred back to him and that Nissan did not incur a loss.
In response to the charges, Nissan said in a statement that it “takes this situation extremely seriously and expresses its deepest regret for any concern caused to its stakeholders.”
It said it would “continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”
As for Ghosn’s alleged shifting of investment losses to Nissan, the company said it “does not in any way tolerate such misconduct and calls for strict penalties.”
Otsuru said on Friday his team would apply for bail for Ghosn. However, it is uncommon for defendants in Japan who deny their charges to be granted bail ahead of trial.
Otsuru earlier this week said Ghosn would likely be held until the trial, which he said could begin in about six months.
In this photo taken on Nov 8, 2018, chairman and CEO of Renault-Nissan-Mitsubishi alliance Carlos Ghosn looks on during a visit to a Renault factory at Maubeuge, northern France. (LUDOVIC MARIN / AFP)
Even if bail were granted, Ghosn would not likely be released until Tuesday given that Monday is public holiday, and all banks will be closed through the long weekend.
The boards of Nissan and its French 43.4 percent owner, Renault SA, met on Thursday for an update on the Ghosn investigations, with Nissan later saying it remained committed to an alliance which has been strained by the case.
Also on Thursday, Ghosn’s wife, Carole, issued a statement on his continued detention, asking Japanese authorities for more information on her husband’s health after he ran a fever, saying she was worried about his recovery.
"I am pleading with the Japanese authorities to provide us with any information at all about my husband's health. We are fearful and very worried his recovery will be complicated while he continues to endure such harsh conditions and unfair treatment," she said.
Apart from prosecutors, only embassy officials and Ghosn's lawyers are allowed to visit him. Such visits were canceled Thursday but resumed Friday.
Before his sudden downfall, Ghosn was a respected figure in the global auto industry, having rescued the Japanese automaker from near-bankruptcy, building its sales operations and profits and pioneering ecological vehicles.
Nissan says an internal investigation began middle of last year after whistleblowers came forward. Nissan Chief Executive Hiroto Saikawa has denounced Ghosn, accusing him of using company money and assets for personal gain.
Ethics officials at Nissan's alliance partner Renault SA of France concluded this week that financial compensation to members of the French automaker's executive committee in 2017 and 2018 was fraud-free. The review was initiated after Ghosn was arrested. Ghosn remains CEO of Renault.
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