Nissan's ex-chair Ghosn appears in court, asserts innocence

In this Oct. 6, 2017, file photo, Renault and Nissan Motor Co.'s chairman Carlos Ghosn listens during a media conference outside Paris, France. Photo: AP/ Michel Euler
In this Oct. 6, 2017, file photo, Renault and Nissan Motor Co.'s chairman Carlos Ghosn listens during a media conference outside Paris, France.

January 08, 2019 06:55 AM

The former chairman of Japan's Nissan Motor Co., Carlos Ghosn, denied any wrongdoing and proclaimed his loyalty to the company at a court hearing in Tokyo on Tuesday.

It was Ghosn's first public appearance since he was arrested on Nov. 19 and charged with false financial reporting.

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"Your honor, I am innocent of the accusations against me," Ghosn told the judge, speaking firmly and calmly as he read from a statement. "I am wrongfully accused."

Prosecutors have charged Ghosn, who led a dramatic turnaround at the Japanese automaker over the past two decades, with falsifying financial reports in underreporting his income by about 5 billion yen ($44 million) over five years through 2015.

They also say he is suspected of having Nissan temporarily take on his investment losses from the financial crisis.

Wearing plastic slippers and a dark suit without a tie, Ghosn rebutted the allegations against him point-by-point and said he had the option to leave Nissan but had decided to stay on.


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"A captain doesn't jump ship during a storm," said Ghosn, who was visibly thinner than before his arrest.

The veteran auto executive, a familiar face at the World Economic Forum in Davos, Switzerland, and other elite gatherings, was handcuffed and led into the courtroom with a rope around his waist as the hearing began. Officers removed his handcuffs and seated him on a bench.

Presiding judge Yuichi Tada then read out the charges and said Ghosn, a Brazilian-born Frenchman of Lebanese ancestry, was considered a flight risk — he was arrested on his arrival in Tokyo by private jet — and might try to hide evidence.

In Japan, suspects are routinely held without bail, often due to fears about evidence tampering.

During Tuesday's hearing, Go Kondo, one of Ghosn's lawyers, argued he was not a flight risk.

"He's widely known so it's difficult for him to escape. There is no risk that the suspect will destroy evidence," he said.

Facing the courtroom, Ghosn spoke proudly of the automaker's — and his own — achievements, such as reviving iconic models like the GT-R and the Z, expanding operations in China, Russia, Brazil and India and pioneering electric cars and autonomous driving.

"I have a genuine love and appreciation for Nissan," he said.

Ghosn has been held in Spartan conditions at a Tokyo detention facility since he was taken into custody. However, Ghosn's defense lawyer Motonari Ohtsuru told reporters at the Foreign Correspondents' Club late Tuesday that Ghosn was transferred to a bigger room with a bed at his request.

In keeping with Japanese regulations, he has been allowed visits only from his lawyers and consular officials.

Ghosn said he had "acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company with the sole purpose of supporting and strengthening Nissan," according to a statement released to some media including The Associated Press before the hearing and confirmed by his legal team.

It said he had not failed to disclose any of his income from Nissan.

Ghosn also defended payments questioned by prosecutors and by Nissan that were made to Khaled Juffali, a Saudi businessman. He said the money was paid to Juffali for real work that he did to sort out problems with a local distributor.

Before the hearing, the Khaled Juffali Company issued a statement saying the $14.7 million in payments over four years from Nissan "were for legitimate business purposes."

Other Nissan executives approved the payment, Ohtsuru said.

Ghosn said his personal investment losses stemmed from being paid in Japanese yen and that he had only asked Nissan to temporarily provide collateral for foreign exchange contracts. The company suffered no losses, he said.

Sent to Japan by Nissan's alliance partner Renault SA of France in 1999, Ghosn led a spectacular turnaround at the Yokohama-based automaker over two decades, during which he mostly served as chief executive.

Renault owns 43 percent of Nissan, while Nissan owns 15 percent of Renault. The alliance, which in recent years has added smaller Japanese automaker Mitsubishi Motors Corp., has risen to be one of the most successful in the industry, rivaling Volkswagen AG of Germany and Japan's Toyota Motor Corp.

Ghosn remains the head of Renault and is still on Nissan's board of directors.

His courtroom appearance drew worldwide attention, with throngs of cameras set up outside the Tokyo Detention Center to capture his departure. No cameras or audio recordings are allowed in Japanese court sessions.

Authorities also arrested a fellow Nissan executive and aide to Ghosn, Greg Kelly, charging him with collaborating with Ghosn to underreport his income. Kelly, an American, was released on bail on Dec. 25. He also has maintained his innocence.

Tokyo prosecutors have repeatedly extended Ghosn's detention by adding new allegations. The latest is suspicion of breach of trust stemming from the claim he had Nissan temporarily shoulder his personal investment losses.

Formal charges on those allegations have not been filed and no trial dates have been set for Ghosn or Kelly.

Ghosn's detention now runs through Friday.

Ohtsuru said that preparations for a trial on charges of breach of trust could take months. He said he would continue to appeal Ghosn's detention.

Ghosn's protege and successor, Nissan Chief Executive Hiroto Saikawa, has denounced Ghosn, claiming he used company assets and money for personal gain and falsified financial reports.

Nissan spokesman Nicholas Maxfield said an investigation by the company that found "substantial and convincing evidence of misconduct" prompted prosecutors to act.

Under Japanese law, falsifying financial reporting carries the maximum penalty of 10 years in prison, a 10 million yen ($89,000) fine, or both. But some experts have questioned the allegations against Kelly and Ghosn since Nissan itself, not individual executives, should be responsible for filing such financial reports.

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Credits

The Associated Press

(Copyright 2019 by The Associated Press. All Rights Reserved.)

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