Carlos Ghosn will spend Christmas in detention

After about a month in detention in Japan, it was expected that Carlos Ghosn - who leads the Renault-Nissan-Mitsubishi Alliance - would be free on Friday 21, as Tokyo District Court unexpectedly rejected prosecutors’ request to extend the arrest.

Reporters were ready for a press conference with Carlos Ghosn, but as often happens in Japan, prosecutors announced new allegations to gain another 10 days of arrest (at least through the end of this year).

It's already his third arrest, which will extend the total detention to about 40 days, during which the suspect can be held, interrogated (up to eight hours a day) without the presence of a lawyer, while prosecutors pursue their investigations without indictment. Interestingly, Greg Kelly is not included in the third set of allegations, which in theory opens up his chance for release on December 25.

"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. "

The maximum penalty, if the allegations are proven, is 10 years in prison and/or fines (over $6 million).

Sequence:

  • Nissan initiated an internal investigation about Carlos Ghosn's earnings
  • November 19 - Carlos Ghosn and Greg Kelly were surprisingly arrested in Japan over alleged financial misconduct at Nissan (under-reporting his income of some $44 million in 2010-2015)
  • November 22 - The board of directors for Nissan removed Carlos Ghosn and Greg Kelly from Representative Director positions (Ghosn was also Chairman of the Board).
  • November 26 - Mitsubishi Motors removed Carlos Ghosn from his role as Chairman of the Board and Representative Director, following Nissan.
  • Renault abstained from the reaction
  • Nissan was unable to choose a successor for Ghosn
  • December 10 - Carlos Ghosn and Kelly were re-arrested on allegations of under-reporting his income for the subsequent three years
  • December 20 - Tokyo District Court unexpectedly rejected prosecutors’ request to extend Ghosn’s and Kelly's. Ghosn was expected to be free on December 21
  • December 21 - Carlos Ghosn was re-arrested on a new allegation of making Nissan shoulder $16.6 million in personal investment losses. Kelly was not included so he is expected to be free on December 25.
The main question about Carlos Ghosn is about the internal situation in Renault-Nissan-Mitsubishi Alliance. The three separate entities were acting as an alliance, but apparently, not everyone was happy about the leading role of Renault, which owns 43% of Nissan.

The Japanese company was rescued from near-bankruptcy by Carlos Ghosn, but the Japanese government and probably some of Nissan's shareholders weren't happy about a possible upcoming merger/acquisition of Nissan by Renault. It could be a reason to remove Carlos Ghosn (as well as why Renault is not removing Ghosn).

The other thread is that Carlos Ghosn apparently intended to remove current Nissan CEO Hiroto Saikawa because of poor results of the company.

Well, it seems that the upcoming press conference with Carlos Ghosn (in January at the earliest) could be an earthquake for the Nissan and Alliance. Not a good sign for Nissan, which already postponed LEAF e-Plus “to ensure that this important product unveiling could receive the coverage it merits”.

Source: Reuters, Reuters, BBC