Tokyo court decides not to extend Ghosn’s detention

TOKYO — A Tokyo court on Thursday unexpectedly decided not to extend the detention of Nissan’s ousted chairman, Carlos Ghosn, raising speculation that he may soon be released from jail where he has been confined since his arrest for alleged financial misconduct.

Ghosn’s lawyers said they plan to apply for bail, and the executive could be out as soon as Friday if the request is approved. However Tokyo prosecutors appealed the court decision. There is no set timing for a decision on the appeal.

The Tokyo District Court also decided against extending detention for Ghosn’s close aide, Greg Kelly.

Ghosn, 64, and Kelly, 62, were detained on Nov. 19 in Tokyo. They deny the financial misconduct allegations. Ghosn has been indicted for allegedly understating his income over a five-year period from 2010. He was re-arrested on Dec. 10 for the same alleged crime covering the past three years. The 10-day detention period in the second instance ran out on Thursday.

The court had widely been expected to extend the detention, as granting bail to suspects who insist on their innocence is unusual in Japan. It was not immediately clear how much the bail would be, meaning it was still uncertain whether Ghosn’s release or Kelly’s release were possible.

Ghosn’s Nissan income is at the center of allegations by Tokyo prosecutors, who have charged the once-feted executive for failing to disclose compensation that he had arranged to receive later. Nissan has said its whistleblower investigation also uncovered personal use of company funds and other misconduct.

The scandal has shaken the Renault-Nissan-Mitsubishi alliance, with Nissan CEO Hiroto Saikawa calling for changes to weaken Renault’s control.

Renault has so far not replaced Ghosn as head of the French carmaker, saying Ghosn’s compensation had been in compliance with law and governance guidelines. Documents seen by Reuters showed that executives at both Nissan and Renault were involved in discussions about compensating Ghosn out of the public eye.

A Nissan spokesman declined to comment on the court’s decision, saying he could only speak about the company’s investigations or executive misconduct.

Nissan CEO Hiroto Saikawa traveled to Amsterdam for a Dec. 18 meeting of the alliance between Nissan, Renault and the third partner, Mitsubishi Motors. While there, he had a one-on-one meeting with Renault interim chief Thierry Bollore that Saikawa described as “positive” and “productive,” according to Nissan.

Saikawa has emerged as a driving force in the investigation about the alleged wrongdoing by Ghosn and Kelly. Renault, Nissan’s largest shareholder and the company that bailed out the Japanese automaker two decades back, has been pressing for specifics, as has the French government.

The arrests were the result of a coup by executives including Saikawa, Kelly’s wife, Dee Kelly, said in a video released Wednesday. Saikawa was asked on the day Ghosn and Kelly were arrested whether a coup was underway at Nissan. He replied: “That is not my understanding. I didn’t make such an explanation and think you should not think of it that way.”

If proven, Ghosn’s alleged offense may carry a sentence of as much as 10 years. The formerly high-flying executive has also been accused by Nissan of misusing company funds, including to buy homes from Brazil to Lebanon.

Ghosn’s lawyers have said the charge that he helped himself by converting compensation to deferred pay is flawed because the compensation agreement wasn’t properly ratified, according to a statement by the office of Motonari Otsuru, Ghosn’s lawyer. Otsuru is a former head of a special investigation task force of the Tokyo public prosecutor’s office.

Reuters and Bloomberg contributed to this report

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