TOKYO—Nissan Motor Co.’s former Chairman Carlos Ghosn’s chances of bail were derailed Friday when prosecutors cited new suspicions that he shifted personal losses to Nissan, in a move that keeps him behind bars longer.

Prosecutors said they suspected that in October 2008, in the midst of the global financial crisis, Mr. Ghosn temporarily forced Nissan to take over a personal derivative contract that was sitting on ¥1.85 billion ($16.6 million) in losses at the time.

...</s>Carlos Ghosn remains behind bars as prosecutors cited new suspicions that the former Nissan CEO shifted personal losses to the automaker.

This keeps Ghosn behind bars for another two days with prosecutors having the ability to stretch the detention for as much as 20 days.

Prosecutors said they suspected that in October 2008, in the midst of the global financial crisis, Ghosn temporarily forced Nissan to take over a personal derivative contract that was sitting on $16.6 million in losses at the time, according to the wall Street Journal.

Ghosn later reportedly took back the contract onto his personal books and received help from an unidentified person in submitting a statement backing up his credit to the bank on the other side of the contract, prosecutors said in a statement outlining their suspicions.

Then, between 2009 and 2012, Ghosn had a Nissan subsidiary transfer a total of $14.7 million into an account controlled by that person, the statement said.

Those suspicions, if proven, would constitute “special breach of trust,” a criminal violation under Japan’s company law that signifies an executive has abused his position for personal gain, prosecutors said.

Ghosn was indicted on Dec. 10 on charges of underreporting his compensation on Nissan’s financial statement over a five-year period ending in March 2015.

At the same time, prosecutors cited new suspicions that Ghosn underreported his compensation for the three years ending in March 2018, using that as a basis to extend his detention without bail.

On Thursday, prosecutors suffered a rare loss after a judge rejected their request to hold Ghosn for 10 more days without the possibility of bail on the basis of those additional suspicions.

It is rare for a court to reject a request to extend the detention period, said Tokyo deputy chief prosecutor Shin Kukimoto on Thursday.

The new suspicions came shortly before the scheduled bail hearing on Friday.

Ghosn’s lawyers said his client maintains his innocence and hopes to restore his honor at trial.</s>Tokyo: Japanese prosecutors re-arrested Nissan Motor Co Ltd’s ousted chairman Carlos Ghosn on Friday on fresh allegations of making Nissan shoulder $16.6 million in personal investment losses, dashing chances he would be released on bail imminently. Prosecutors also raided Ghosn’s residence in Tokyo on Friday in search of evidence, broadcaster TV Asahi reported.

The latest twist in a saga that has jolted the global auto industry and Nissan’s alliance with France’s Renault SA came a day after a Tokyo court unexpectedly rejected prosecutors’ request to extend Ghosn’s detention. That rejection had raised the possibility that the prominent businessman could go free on bail as early as Friday.

The re-arrest, however, means he could be detained for at least another 10 days in a Tokyo jail, where he has been confined since he was arrested last month on initial allegations of financial misconduct.

The Tokyo prosecutor said the fresh arrest was based on suspicions that around October 2008, Ghosn shifted personal trades to the automaker to make it responsible for 1.85 billion yen ($16.6 million) in appraisal losses, and inflicted damage on Nissan by having it deposit a total of $14.7 million on four occasions between June 2009 and March 2012 into a related bank account.

Also read: Carlos Ghosn got six houses from Nissan, including in Tokyo and New York

Carlos Ghosn’s lawyer, Motonari Otsuru, was not available for comment. Otsuru has previously declined to return calls about the Ghosn case.

Kyodo news agency said that when the allegation that Carlos Ghosn had shifted the paper losses first surfaced in media reports late last month, Otsuru said his client had denied the allegation. Ghosn had considered the move but did not do so after being told by financial authorities that it would be illegal, Kyodo quoted Otsuru as saying then.

The Tokyo court said in a statement on Friday that the lawyer for Ghosn’s former deputy Greg Kelly, who was arrested along with Ghosn, has requested his client’s release. Kelly’s detention extension was rejected along with Ghosn’s. The dramatic turn of events came hours after Ghosn, through his lawyer and quoted by Japanese public broadcaster NHK, vowed to restore his good name in court and to hold a news conference after his release. “Things as they stand are absolutely unacceptable,” he was quoted as saying. “I want to have my position heard and restore my honour in court.”

Also read: How Carlos Ghosn hid $70 million from the firm that paid him

Television camera crews had gathered outside the Tokyo jail on Friday morning in hopes of catching sight of Ghosn being released.

Carlos Ghosn was initially arrested on November 19 for allegedly understating his income by about half over a five-year period from 2010. Ghosn was later re-arrested for a similar alleged crime covering the past three years. The maximum penalty for both understating compensation and the latest accusation — aggravated breach of trust — is up to 10 years in prison and/or a fine of 10 million yen.

Nissan said after his arrest that it unearthed multiple instances of possible wrongdoing in an internal investigation triggered by a whistleblower.

The internal probe is ongoing, and has included allegations of diverting company funds to pay for personal expenses. Sources have told Reuters that investigators have been looking into the use of an internal “CEO Reserve” fund and the role of overseas subsidiaries in alleged financial misconduct.

The Carlos Ghosn case has put Japan’s criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defence lawyers from being present during interrogations, which can last eight hours a day.

The case also marked a dramatic fall for the leader of the Nissan-Renault-Mitsubishi alliance who was once hailed for rescuing Nissan from the brink of bankruptcy. Nissan Chief Executive Hiroto Saikawa has since called for changes to weaken the clout of controlling shareholder Renault.

Documents seen by Reuters showed that some discussions about compensating Ghosn out of the public eye were not confined to Nissan, but also included Renault executives.

While Nissan ousted Ghosn from his role as chairman shortly after the initial arrest, Renault has so far not replaced him.

A Nissan spokesman declined to comment on the re-arrest, saying only that the internal investigation was ongoing and expanding into new areas. Renault declined to comment.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.</s>Nissan Motor’s board voted on Thursday to oust Carlos Ghosn from his post as chairman following his shock arrest this week, marking the stunning downfall of the executive once hailed as the saviour of the Japanese automaker.

The removal of Ghosn clouds the direction of the Renault-Nissan alliance, which he had personally shaped and pledged to consolidate with a deeper tie-up despite reservations at Nissan. Ghosn is also Renault’s chairman and chief executive.

The board also voted to remove Greg Kelly from his position as representative director, the Nikkei newspaper reported. Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Ghosn engaged in wrongdoing, including personal use of company money and under-reporting of his earnings for years.

Tokyo prosecutors have accused Ghosn and Kelly of financial misconduct and they remain in custody. Ghosn and Kelly have not commented on the accusations. A Nissan spokesman declined to comment.</s>TOKYO - Prosecutors re-arrested former Nissan boss Carlos Ghosn over fresh allegations on Friday, apparently dashing his hopes of an early release in the latest twist to a rollercoaster saga.

The case of the once-revered 64-year-old tycoon has gripped Japan since he was arrested completely out of the blue as he stepped off his private jet at Tokyo’s Haneda Airport on 19 November.

And in another unexpected development, Ghosn was arrested on Friday on suspicion of transferring losses from personal financial investments to Nissan, causing damage to the company’s assets, according to a statement from prosecutors.

He has already been formally charged with under-reporting his income by tens of millions of dollars over several years and faces a second batch of allegations that this continued for three further years.

However, the auto baron had had his hopes raised of being freed on bail after a court rejected a bid by prosecutors to extend his detention over the second set of allegations.

But this fresh arrest gives prosecutors 48 hours to question him on the new matter - possibly extended beyond that.

Since his stunning arrest last month, the once jet-setting executive has languished in a tiny cell in a detention centre in northern Tokyo, where he has complained about the cold and the rice-based menu.

His lengthy detention - in Japan, suspects can be “re-arrested” several times over different allegations - has sparked criticism, especially from abroad.

Ghosn has an unusually high profile for a foreign executive in Japan and was credited with turning around the struggling car giant Nissan and forging a three-way alliance with French manufacturer Renault and fellow Japanese firm Mitsubishi Motors.

He was seen as the glue holding together the fractious alliance and his arrest has exposed major rifts between Nissan - which makes the most money - and Renault, the dominant shareholder.

According to local media, Ghosn has admitted signing documents to defer part of his salary until after retirement but said this amount did not need to be declared as it had not yet been definitively fixed.

The suspicion is that he sought to defer part of his pay to avoid criticism from staff and shareholders that his salary was too generous.

Both Nissan and Mitsubishi Motors promptly sacked Ghosn as chairman following his arrest, on the basis of a months-long internal Nissan investigation.

Renault has been much more cautious, keeping him on as chairman and CEO and appointing Thierry Bollore as interim boss.

In addition to charges against Ghosn and Kelly, prosecutors have also indicted Nissan, as the company submitted the official documents that allegedly under-reported his income.

On Thursday, the company pointedly declined to comment, saying it was “exclusively between the court and the prosecutors”.

It said the decision to fire Ghosn was “based on the substantial and convincing evidence” from an internal investigation.

“Both Ghosn and Kelly have violated their director duty of care,” the firm added in a statement.

Nissan has also accused its former boss of other financial impropriety, including using Nissan funds to purchase luxury homes around the world.

One of these - a luxurious, 800-square-metre spread with ocean views over Rio de Janeiro’s famous Copacabana Beach - has become the subject of a legal battle.

Last week, Ghosn family members entered the flat, removed “personal effects” and opened the safes, according to Nissan. This followed a court order giving Ghosn’s representatives' access despite objections from the Japanese firm.</s>Japanese prosecutors re-arrested Nissan Motor Co’s ousted chairman Carlos Ghosn on fresh allegations of aggravated breach of trust on Friday, dashing chances he would soon be released on bail, media reported.

A Tokyo court had unexpectedly rejected prosecutors’ request to extend Ghosn’s detention a day earlier, which raised the possibility that he could go free on bail as early as Friday.

The re-arrest means he could be detained for another 10 days in a Tokyo jail, where he has been confined since he was arrested on initial allegations of financial misconduct.

There was no immediate word on Greg Kelly, who was arrested along with Ghosn and whose detention extension was rejected.

Kyodo News said the new allegations were based on suspicions that Ghosn made the automaker shoulder personal investment losses of about 1.85 billion yen ($16.6 million) that he had incurred around 2008.

His lawyer, Motonari Otsuru, was not available for comment. The lawyer has previously declined to return calls regarding the Ghosn case.

The dramatic turn of events came hours after Ghosn, through his lawyer and quoted by Japanese public broadcaster NHK, vowed to restore his good name in court and to hold a news conference after his release.

“Things as they stand are absolutely unacceptable,” he was quoted as saying. “I want to have my position heard and restore my honour in court.”

Ghosn was initially arrested on Nov. 19 for allegedly understating his income by about half over a five-year period from 2010. He was later charged with the same alleged crime covering the past three years.

Television camera crews had gathered outside the Tokyo jail on Friday morning in hopes of catching sight of Ghosn being released.

The Ghosn case has put Japan’s criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defence lawyers from being present during interrogations, which can last eight hours a day.

Ghosn’s arrest has marked a dramatic fall for a leader once hailed for rescuing Nissan from the brink of bankruptcy.

It has also shaken the Renault-Nissan-Mitsubishi alliance, with Nissan Chief Executive Hiroto Saikawa calling for changes to weaken Renault SA’s control.</s>Nissan Motor Company’s former chairperson Carlos Ghosn was arrested again on Friday on fresh allegations that he shifted $16.6 million, around Rs 116.10 crore, in personal investment losses to the company, Reuters reported. The re-arrest means he could be detained for at least 10 more days in jail.

Ghosn was arrested in Tokyo last month on charges of under-reporting his earnings. Ghosn – a French citizen of Lebanese descent who was born in Brazil – had played a major role in the formation of a strategic partnership between Nissan, its French partner Renault and Mitsubishi Motors.

The new arrest came a day after a court in Japan rejected prosecutors’ request to extend Ghosn’s detention. It also rejected a detention extension for the company’s former Representative Director Greg Kelly, who had also been arrested in November.

Ghosn is alleged to have shifted personal trades to Nissan in October 2008 in order to avoid paying 1.85 billion yen, or $16.6 million, in losses, according to the Tokyo prosecutor.

Hours earlier, Ghosn’s lawyer Motonari Otsuru had promised to restore his client’s reputation in court. “Things as they stand are absolutely unacceptable,” Otsuru said, on Ghosn’s behalf. “I want to have my position heard and restore my honour in court.”

On November 22, Nissan’s board of directors had dismissed him as chairperson. Japanese multinational automotive manufacturer Mitsubishi Motors had also dismissed Ghosn from the post, while Renault replaced Ghosn with a temporary deputy chief executive on the request of the French government. The French government holds 15% stake in Renault.</s>TOKYO — Carlos Ghosn, the former Nissan Motor chairman, was arrested again by Japanese authorities on Friday, this time on suspicion that he shifted more than $16 million in personal losses incurred a decade ago to the automaker.

The rearrest of Mr. Ghosn dealt a setback to his hopes for getting released from the Tokyo jail where he has been held for more than a month on different charges. It also adds to the legal problems of an executive who once oversaw a sprawling automotive global empire that sold more than 10 million cars last year.

Japanese authorities rearrested Mr. Ghosn on suspicion of breach of trust related to a financial investment that tumbled in value during the 2008 global financial crisis, according to NHK, the Japanese public broadcaster. Authorities said he transferred the investment, a derivative contract, to Nissan from his personal asset management company. Mr. Ghosn’s Japanese lawyer could not immediately be reached for comment.

The rearrest essentially gives Japanese prosecutors another chance to keep Mr. Ghosn in jail. He has been at the same detention center since Nov. 19, when law enforcement officials descended on a corporate jet after it landed and arrested him on suspicion that he underreported his compensation to Japanese authorities.</s>
• Former Nissan chairman Carlos Ghosn was arrested in Japan last month on allegations of financial misconduct.
• He’s been re-arrested several times and remains in a Japanese jail.
• Nissan has deposed him as chairman, but the Renault side of the Renault-Nissan-Mitsubishi alliance has stood by him.

Last month, Carlos Ghosn was arrested in Japan when his private jet landed at Tokyo’s Haneda Airport. The now-former chairman of Nissan was nabbed alongside a Nissan director, American Greg Kelly.

That was in mid-December, and both men have been sitting in a Japanese jail ever since. From media reports, it doesn’t sound like a country club incarceration, either. For Ghosn – the architect of an alliance among Nissan, France’s Renault, and Mitsubishi that was the world’s largest automotive conglomerate by sales volume in 2017 – it’s hard time, after a high-flying career.

Ghosn has now been re-arrested three times; Japanese prosecutors allege that he’s hidden millions in compensation and even employed financial engineering to conceal personal investment losses. Kelly hasn’t been re-arrested three times, but he’s being investigated as a Ghosn enabler.

There are 2 main theories about what’s going on here

There are now two main theories about what’s going on here.

Number one is that Ghosn did everything he’s been accused of, but that for years Nissan and Renault – a complicated, multinational colossus – looked the other way. Ghosn has long been a celebrity CEO in the auto industry, and although his star has dimmed in recent years as he eased toward retirement, it was widely thought by conjoining Renault and Nissan, then adding struggling Mitsubishi, he has pulled off the impossible.

Number two is that a “palace coup” is underway at Nissan, and that the Japanese carmaker wants to either shatter the alliance or revamp Renault’s outsized influence. Renault owns 43% of Nissan, yet Nissan contributes most of the profits to the tripartite entity. Renault recently affirmed Ghosn’s role as chairman and CEO and concluded that he didn’t do anything wrong.

Parts of both theories are probably right. Ghosn was imperious and had enemies. He wasn’t a kinder, gentler auto executive. He brandished his accomplishments and his position. But did he do anything illegal? We don’t know yet – everything is currently at the level of allegations.

On the other hand, the reactions of Nissan and Renault clearly show that the Japanese side wants him gone – and not just gone, but disgraced and perhaps imprisoned – while the French side is fighting for its stake in the alliance.

By Japanese law, Ghosn can remain jailed for a while. This is of course why he and Kelly were arrested in the country (Kelly was convinced to fly to Japan for a meeting despite plans for surgery). And thus far, the investigation and reports about it have revealed a web of financial entities that the alliance created to deal with biggest Ghosn problem: that the executive thought he was underpaid relative to his peers in the global car business.

He was underpaid relative to, say, General Motors CEO Mary Barra: she made $23 million in 2017, while Ghosn made $17 million. But Barra’s compensation was a mix of salary and stock, while Ghosn brought home his millions through three separate companies. And according to a Reuters breakdown, he still did better than just about everybody else in the industry, and that doesn’t even account for decades of perks, ranging from business jets to residences.

Ghosn’s only offense might have been greed

So Ghosn could have been sort of greedy. Whether that greed was illegal is what we’re all waiting to find out. And we’ve been waiting too long. Ghosn and Kelly should be able to defend themselves at this juncture (Kelly might be able to, if he avoids re-arrest).

Ghosn’s defense actually might not look that good. Coming up with ways todefer=”defer”millions in compensation and establish shell companies to shift money around might not have been overtly illegal, but it looks like an arrogant executive using the Byzantine structure of his companies to shield his earnings from scrutiny.

Having watched Ghosn in action for over a decade, I think it’s unlikely he’d admit any wrongdoing. He’s typically rather brusk and to-the-point, and he’s far enough along in his career that he might not actually care if he comes off as a Machiavellian global plutocrat, bending every rule in the book while arguing that his ends justify his means.

At the same time, the world is getting an education in Japanese justice – or the lack of it. Every time Ghosn is re-arrested, the presumption of guilt intensifies. If this continues for much longer, it’s difficult to imagine how he gets a fair hearing in Japan, which would help anyone who wants him out at Nissan to realize their goal.

Renault didn’t fold up, however, and if the palace-coup theory is correct, then Nissan miscalculated. The French government might have no choice but to get behind Ghosn, given its stake in Renault.

Before any of that happens, the Japanese should free Carlos and allow the accused man to present his case.</s>Nissan Motor Co. is trying to block access to homes used by in Beirut and Rio de Janeiro, part of a global network of real estate owned by the carmaker and provided to its ousted chairman, according to people familiar with the situation.

Nissan provided Ghosn and his family with use of properties from Brazil to France during his tenure, which came to an abrupt end last month when the car titan was arrested in Tokyo over suspected financial crimes.

Prosecutors in Japan indicted Ghosn and Nissan on Monday, accusing him of under-reporting his income. The Franco-Brazilian executive was arrested again in Tokyo on charges that cover a different time period than the earlier charges. That will keep him in detention for at least another 10 days.

 



ALSO READ: Carlos Ghosn's detention not extended; Tokyo court may soon release him

While that legal battle plays out in Japan, Nissan has been working to prevent Ghosn’s family from gaining access to a luxury apartment in worth roughly $3 million and a pale-pink mansion in the historic district of Beirut that the automaker bought for $8.75 million in 2012, say the people, who are familiar with the investigation Nissan conducted into Ghosn that laid the groundwork for his arrest.

Locks have already been changed at several properties, the people said. Ghosn’s wife, Carole, was prevented from entering the home in Beirut, they said. In Brazil, Nissan is petitioning a local court’s decision to grant Ghosn’s representatives access to the Rio apartment “due to a high likelihood of evidence being removed or destroyed,” the carmaker said in a statement Monday.



Nissan hasn’t been able to enter other homes in Paris and Amsterdam because only Ghosn and his assistant have keys to the properties, according to the people.

Bloomberg News tracked down five of the Nissan properties. While Ghosn wasn’t a frequent visitor of any of the locations -- famously spending much of his time in the company’s private airplane as he jetted among continents -- his presence was noted by neighbors and service providers interviewed by Bloomberg reporters.

It’s unclear if Ghosn’s use of the houses is being probed by Japanese prosecutors, but the people familiar with the matter say they figure in the carmaker’s investigation into its former chairman, who brought Nissan back from the brink by creating an alliance with Renault SA nearly two decades ago.

 



ALSO READ: Nissan puts brakes on naming Ghosn successor amid tensions with Renault

The locations of the residences were checked against addresses listed in documents viewed by Bloomberg, including transaction and land registry records, and interviews with service providers and people with direct knowledge of the Nissan investigation and Ghosn’s case who requested anonymity to discuss private information.

Nissan pays the rent of 8,000 euros a month on this apartment, which is used exclusively by Ghosn, one person said. Nissan is now trying to terminate the lease and secure inventories. The apartment is also listed as Ghosn’s address on land registry documents for a house near Paris that he co-owns with his first wife, Rita.

This house is registered to Nissan but was at Ghosn’s disposal, said Hadi Hachem, chief of staff of Lebanon’s minister of foreign affairs. Nissan paid $8.75 million for the home in 2012, and former Nissan representative director Greg Kelly handled the deal, one person with knowledge of the investigation said. Nissan then spent an additional $6 million renovating the home, which includes a wine cellar and sarcophagi displayed in a glass case near the entrance, the person said. A barber, whose shop is a few meters from the house and who has seen Ghosn at the residence several times, said there appeared to be a dinner party there on the Friday night before Ghosn was arrested. Ghosn planned to buy the house from Nissan and transfer the ownership to himself, but the transfer hasn’t been completed, according to people familiar with the matter.

Located on one of Paris’s most luxurious avenues and spanning three floors, it was bought by a Nissan subsidiary in 2006, French land registry documents show. The original purchase price was less than $4 million, and it was originally rented by Ghosn, one person said. A resident of the building said that she had not seen Ghosn for at least two years.

After Ghosn’s arrest, representatives from Nissan changed the locks to this apartment and took cars from its garage, according to a person with knowledge of the actions. Nissan owns the apartment, two people said. Property records list the owner as Hamsa 1 Limited, which is registered in the British Virgin Islands. It signed the deed in January 2012, paying 10.5 million reais, records show. That was the equivalent of nearly $6 million at the time.

This apartment was leased in Ghosn’s name until June 2017, when it was transferred to Nissan. The company paid the monthly 1-million-yen ($8,900) rent before and after the transfer, one person said. It was used only by Ghosn and his family and only for a few days each month on average. Nissan has secured access to the apartment since Ghosn’s arrest.
Carlos Ghosn, formerly the chairman of Nissan, is arrested again on suspicion of shifting personal losses to the company.