Ghosn detention extended as new bail applciation is rejected

Prosecuters in Japan continue to build case against ousted Nissan chairman

Carlos Ghosn’s latest bail application was rejected by a Japanese court, extending his detention and helping prosecutors build their case against the fallen car titan who has already been in jail for almost two months.

The decision was announced Tuesday by the Tokyo District Court. Mr Ghosn's lawyers had submitted a bail application last week after the executive was indicted for a second count of financial misconduct accusations.

The rejection is a win for the prosecutors who want to keep questioning Mr Ghosn as they continue to build their case ahead of an eventual trial. The ousted Nissan chairman has been indicted for understating his income by tens of millions of dollars and for "breach of trust" by acts including passing on trading losses to the carmaker.

The arrest of the high-flying executive on November 19th at Tokyo's Haneda airport has rocked the world's biggest auto alliance, raising questions over whether the two-decade partnership between Nissan and French partner Renault SA will survive his downfall. While Nissan dismissed Mr Ghosn as chairman shortly after his arrest, Renault has retained him as chairman and chief executive officer, saying it needs evidence of his wrong-doing.


The time behind bars has already taken its toll on Mr Ghosn. He appeared in public for the first time on January 8th looking gray and gaunt, and was led into a court room handcuffed and with a rope tied around his waist. Mr Ghosn’s wife, Carole, painted a glum picture of her husband’s state, saying she’s fearful for his health and that he’s been denied access to his family since his 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 Mr Ghosn’s case, the judge at a January 8th hearing said his continued detention was due to flight risk and the risk of witness or evidence tampering.

Early last week, Mr Ghosn’s lawyers said their client might remain behind bars until a trial begins, which may not happen for another six months. Prosecutors said Friday that Mr Ghosn’s detention could last for another two months.

Losing Weight

Mr Ghosn holds French, Lebanese and Brazilian passports and his children live in the US His wife said that 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 seven kilograms, she said.

In his court appearance, Mr Ghosn gave a forceful rebuttal to the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are merit-less. An indictment in Japan allows prosecutors to lay formal charges, a step that takes them close to trial. Since Mr 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 Mr Ghosn held in detention without charge for longer than would be permitted in the UK for a suspected terrorist. If and when Mr 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.

If proven, each of Mr Ghosn's alleged offense may carry a sentence of as much as 10 years, prosecutors have said. Nissan has also accused Mr 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, Mr 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 to no cost to the company, Mr Ghosn said. All told, Mr Ghosn said he always acted with integrity and had never been accused of any wrongdoing in his professional career.

Mr 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 Mr Ghosn’s absence to push for more power within the alliance has heightened tensions between the two automakers.

Nissan’s board removed Mr Ghosn from the post of chairman on November 22nd. 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, says Mr Ghosn is presumed innocent until proven guilty and has demanded Nissan share the evidence it’s collated against him.

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