Japanese new allegation against former Nissan chairman Carlos Ghosn

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Japanese new allegation against former Nissan chairman Carlos Ghosn
Japanese prosecutors added a brand new charge of breach of trust over Nissan’s former president, Carlos Ghosn on Friday, destroying his hopes of posting bond.Ghosn, along with another former Nissan executive, Greg Kelly, was detained Nov. 19 and accused of under-reporting his income by about 5 billion yen in 2011-2015. They’re also facing the prospect of extra charges that claim the two underreported Ghosn’s income for other years by almost 10 billion in total.

The new allegations related to breach of trust have been filed a day following a court refused prosecutors petition to get a longer detention of Ghosn and Kelly. Their attorneys were hoping they could get them released on bail as early as Friday.

Thus far, the new allegation only applies to Ghosn and Kelly may nevertheless be bailed out. Kelly’s attorney submitted a bond petition for Kelly that’s pending court approval, in accordance with the Tokyo District Court.

Prosecutors, in a statement released on Friday, stated that Ghosn allegedly caused Nissan a loss of over 1.8 billion yen in 2008 due to a private investment throughout the Lehman meltdown by manipulating a contract. Ghosn had Nissan deposit a total of $14.7 million into a banking account for himself and another person who assisted with the contract manipulation in breach of the company’s trust, prosecutors said.

Ghosn and Kelly are just accused of under-reporting Ghosn’s pay over five decades, in violation of the Financial Instruments and Exchange Law. They’ve not been formally charged with an additional allegation of underreporting another 4 billion yen to get 2016-2018, for which their first 10 day detention was to die Thursday.

The maximum penalty for breaking up the fiscal act is up to 10 years in jail, a 10 million yen fine, or both. Breach of trust also carries a comparable maximum penalty. The conviction rate in Japan is greater than 99% for any crime.

The arrest of a business icon has triggered international attention. Prosecutors have been criticized for separating the same allegation to two charges as tactic to hold Ghosn and Kelly longer. They say Ghosn and Kelly are flight risks. No trial date has been set.

The scandal has also raised concerns on the fiscal health of the Japanese car manufacturer and the future of its own alliance with Renault SA of France.

Ghosn’s fall is seen by some as a maneuver of others in Nissan to acquire power in the alliance.

Kelly’s wife, Donna Kelly, stated in a video message carried by Television Asahi along with other networks which her husband was wrongly convicted as part of power grab, in Nissan.

Greg and Mr. Ghosn fully believe they didn’t break the law, she explained. Renault in 1999 delivered Ghosn to flip Around Nissan, then on the brink of bankruptcy, and he also led its ascent to become the world’s second largest automaker.

Nissan has disregarded Ghosn as president and Kelly as representative director since the allegations were made. Nissan has put off a decision on Ghosn’s replacement.

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