UPDATE: Christmas is out of the question for Ghosn

December 21, 2018 12:00 pm

Image: Reuters

[UPDATE 21/12/2018: Prosecutors in Japan have re-arrested Carlos Ghosn, possibly ending any hopes the former Nissan chairman had of an early release from detention over financial misconduct allegations, the Guardian has reported. Ghosn was instead re-arrested, this time on suspicion of using Nissan funds to cover losses of 1.85bn yen ($16.6m) he incurred from derivatives trading in 2008.]

[The below was posted yesterday when Ghosn had a chance to make bail before December 25.]

After getting arrested on 19 November for understating his salary, Nissan ex-chairman and ex-CEO Carlos Ghosn has been in detention ever since, despite a standard holding period of 23 days post-arrest. His aide Greg Kelly has been in custody this whole time as well.

News broke earlier this week that he could be released before Christmas. What changed?

Wiggle room for Ghosn

When Ghosn and Kelly were first arrested, they had only been detained for questioning following an investigation into Ghosn’s finances instigated by Nissan. According to Japanese law, suspects can only be held for 23 days following an arrest.

According to this timeframe, Ghosn was meant to be released on December 11, but was never let go. The reason for that is that prosecutors officially filed new charges on December 10, which renewed the 23-day holding period to early January 2019. These new charges said that Ghosn had been understating his salary longer than first expected, additionally between 2015 and 2017 for an extra $38 million.

Now, and according to the Financial Times (FT), a Tokyo court has rejected a request from prosecutors to extend the detention of Ghosn’s detention, increasing the possibility that he could be released on bail before Christmas.

“Since the new charges were on the same allegation over falsified financial statements that covered different years, the court likely decided further detention was not necessary, according to Yasuyuki Takai, a former prosecutor and now a defence lawyer,’ FT said.

“Ghosn’s lawyers said they plan to apply for bail, and that the car titan could be out as soon as Friday if the request is approved,” Bloomberg reported. As for Kelly, his “lawyers plan to file for bail Thursday or Friday, Kyodo reported.”

Kelly’s wife, for one, has been pushing for the release of her husband, who she emphasizes requires medical treatment for a spine ailment.

READ: Nissan’s Carlos Ghosn fired: 450,000 employees at risk

The charges  

Image: Reuters

Ghosn’s charges involve under-reporting his salary by $44 million between 2011-2015, and using company assets for personal use, which could mean up to 10 years in prison, or a fine of about $89,000 (10 million yen), or both.

According to the NHK, Japan’s national public broadcasting organization, citing unnamed sources, Nissan spent millions of dollars on luxury homes in four countries without legitimate business justifications.

Millions of dollars had been spent to purchase and renovate the homes in Brazil, Lebanon, France and the Netherlands, the Japanese organization said.

“Nissan takes this situation extremely seriously,” the company said in a statement. “Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”

READ: Nissan no stranger to scandals, now reeling from Ghosn’s misconduct

The stakes are high

Currently, much more hangs in the balance than two multimillionaires. With Nissan eagerly pushing their latest Leaf EV (electric vehicle), the company had to delay the release of its new long-range model due to the ongoing controversy.

Furthermore, the Nissan-Renault-Mitsubishi alliance and its 450,000 or so employees have been caught in the crossfire as well.

Between November 19 and December 20, the date of this writing, Nissan stocks have dropped 11.6% in value, from 1,006 yen ($9.01) to 901 yen ($8.07).

READ: Ghosn has 1% chance of escaping conviction, 10 years behind bars

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Mark Anthony Karam
By Mark Anthony Karam
Mark Anthony Karam has 4 years of experience in the field of visual and written media, having earned his Masters degree from the UK. You can get in touch with him here: [email protected]