Renault-Nissan’s Ghosn proclaims innocence

A lighter and greyer Renault-Nissan-Mitsubishi alliance used his first public appearance today (8/1) to defend himself against allegations that have seen him detained in a Tokyo prison.

If the Japanese prosecutors and judges expected Carlos Ghosn to be meek and chagrined after two months in prison and lead into court wearing plastic slippers, handcuffs and a rope around his waist, they were very much mistaken, with Ghosn slamming the accusations against him.

The man who built a struggling Renault into the leader of a global automotive empire that saved Nissan from bankruptcy and absorbed Mitsubishi declared he was innocent of all allegations against him.

“I have always acted with integrity and have never been accused of any wrongdoing in my several-decade professional career,” Ghosn said, reading from a prepared statement in the Tokyo District Court.

“I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations.”

He also insisted he never received any compensation from Nissan that had not been cleared by the car-maker’s board and that he’d been unfairly detained.

“For me, the test is the ‘death test',” said Ghosn in relation to the under-the-microscope deferred payments. “If I died today, could my heirs require Nissan to pay anything other than my retirement allowance? The answer is an unequivocal ‘no'.”

Ghosn was arrested in Japan in November in a move that looked suspiciously timed to head off Renault’s plans to formally absorb Nissan into a single entity, rather than an alliance.

He has been arrested three times by Japanese prosecutors to stretch out his incarceration; the first two times for underreporting his financial compensation and once for allegedly shifting personal trading losses on to Nissan by forcing it to pay a Saudi Arabian businessman, Khaled Juffali.

Defending the last charge, Ghosn told the court he asked Nissan to “temporarily take on the collateral, so long as it came to no cost to the company while I gathered collateral from my other sources".

He insisted Juffali, a Nissan partner in several Gulf countries, had been “appropriately compensated” by Nissan.

A statement from Juffalii insisted all payments from Nissan to him were for “legitimate business purposes in order to support and promote Nissan’s business strategy in the kingdom of Saudi Arabia, and included reimbursement for business expenses".

Ghosn was only granted the opportunity to defend himself by employing a rarely-used Japanese legal strategy of petitioning the court to end his detention, which is slated to finish on January 11.

Though Ghosn’s legal team understood he had little hope of swaying the court with the unusual strategy (employed by only 583 out of 104,000 detainees in 2017), it created a huge sideshow in Japan.

Ghosn’s lead defense lawyer, Motanari Otsuru, admitted his client would most likely be detained again and that he may not go to trial for at least six months.

“Usually in such a case, an indictment would be made,” Otsuru said. “In general, in such cases in Japan, it is indeed the case that bail is not approved before the first trial.”

While the courtroom was packed, there was a media scrum outside and local media reported that 1100 people lined up for a lottery for the 14 available public gallery seats.

The presiding judge, Yuichi Tada, read out the charges against Ghosn and explained he was being kept in prison because he could tamper with evidence and was a flight risk, despite the ambassadors of two of Ghosn’s three countries of citizenship, Lebanon and France, being in the courtroom. (Ghosn is also a Brazilian citizen).

A member of Ghosn’s legal team, Go Kondo, denied his client was a flight risk.

“He’s CEO of the French company, Renault. He’s widely known, so it’s difficult for him to escape. There is no risk that the suspect will destroy evidence,” Go said.

Until recently, Ghosn headed up the world’s largest car-maker, with the three-brand alliance regularly swapping places with the Volkswagen Group and Toyota for world car sales leadership and selling 10 million cars a year. It is also largest EV and plug-in hybrid car-maker.

“We transformed Nissan, moving it from a position of a debt of 2 trillion yen (US$18.5 billion) in 1999 to cash of 1.8 trillion yen (US$16.6 billion) at the end of 2006, from 2.5 million cars sold in 1999 at a significant loss to 5.8 million cars sold profitably in 2016,” Ghosn said in a statement.

“These accomplishments - secured alongside the peerless team of Nissan employees worldwide - are the greatest joy of my life, next to my family,” he said.

Ghosn was imprisoned after one of his appointees, Nissan CEO Hiroto Saikawa, went to Japanese prosecutors accusing him of hiding almost $US80 million in deferred payments over eight years, to be paid in the form of consultancy fees. That was despite Saikawa signing off the payment documents.

Since then, the Japanese prosecutors have added a laundry list of accusations against Nissan’s former chairman and chief executive, none of which have been proven, including that he forced Nissan to pay for personal foreign-exchange trading losses.

“Contrary to the accusations made by the prosecutors, I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed,” the 64-year-old Ghosn said.

Ghosn has been forced out of his chairmanship roles at Nissan and Mitsubishi, though he retains the chief executive role at Renault. The relationship between Renault, the 43 per cent stakeholder in Nissan, and Nissan, which makes most of the Alliance’s profits, has become extremely tense.

Despite Renault retaining three board seats and a theoretical chairmanship seat at Nissan, the Nissan board is refusing to negotiate with the French company over Ghosn’s replacement.

Ghosn’s family has released a statement insisting he was the victim of an executive coup by Nissan board members.

Ghosn almost made it out of prison for Christmas, when a Tokyo court rejected a request from the prosecutors to extend his incarceration, but he was recharged instead.

The court allowed bail for Ghosn aid and Nissan board member, Greg Kelly, on Christmas Day. Kelly is now in Tokyo awaiting surgery for spinal stenosis.