Ghosn will remain in jail as Japan court rejects bail application

Carlos Ghosn’s latest bail application was rejected by a Japanese court, extending his detention and helping prosecutors build their case against the fallen car titan who has already been in jail for almost two months.

The decision was announced Tuesday by the Tokyo District Court. Ghosn’s lawyers had submitted a bail application last week after the executive was indicted for a second count of financial misconduct accusations. The court did not give a reason for denying bail. At a hearing last week, when his lawyers asked for reasons for his continued detention, the court cited concerns that Ghosn would try to flee or tamper with evidence.

Lawyers for Ghosn have appealed the decision and could receive a response within the next day.

The rejection is a win for the prosecutors who want to keep questioning Ghosn as they continue to build their case ahead of an eventual trial. The ousted Nissan chairman has been indicted for understating his income by tens of millions of dollars and for “breach of trust” by acts including passing on trading losses to the automaker.

The arrest of the high-flying executive on Nov. 19 at Tokyo’s Haneda airport has rocked the world’s biggest auto alliance, raising questions over whether the two-decade partnership between Nissan and French partner Renault will survive his downfall. While Nissan dismissed Ghosn as chairman shortly after his arrest, Renault has retained him as chairman and CEO, saying it needs evidence of his wrong-doing.

Renault, which is the biggest shareholder in Nissan, has instead appointed interim replacements. Renault’s most powerful shareholder, the French state, says Ghosn is presumed innocent until proven guilty and has demanded Nissan share the evidence it has collated against him.

Nissan CEO Hiroto Saikawa said Renault should reach the same conclusion as the Japanese automaker and oust Ghosn if and when it gains access to all the relevant information, according to an interview with French daily Les Echos published Monday.

The French government says it will support Renault’s decision to keep Ghosn at its helm unless it becomes clear he will be “chronically incapacitated” by the Japanese investigation, officials said on Monday.

Tuesday is likely to see “important developments” in relation to that question, one French official said.

Gray and gaunt

The time behind bars has already taken its toll on Ghosn. He appeared in public for the first time on Jan. 8 looking gray and gaunt, and was led into a court room handcuffed and with a rope tied around his waist. Ghosn’s wife, Carole, painted a glum picture of her husband’s state, saying she is fearful for his health and that he has been denied access to his family since his arrest.

It’s not uncommon in Japan for suspects to endure lengthy pre-trial detentions. Suspects are often re-arrested on suspicion of new charges periodically to keep them in custody while prosecutors attempt to build a case, and bail is the exception more than the rule.

Legal experts say this is all a strategy to secure a confession and make a trial easier. In Ghosn’s case, the judge at a Jan. 8 hearing said his continued detention was due to flight risk and the risk of witness or evidence tampering.

Early last week, Ghosn’s lawyers said their client might remain behind bars until a trial begins, which may not happen for another six months. Prosecutors said Friday that Ghosn’s detention could last for another two months.

Losing weight

Ghosn holds French, Lebanese and Brazilian passports and his children live in the U.S. His wife said that her husband is living in “harsh” conditions and enduring “unfair treatment,” and that authorities have not let the family speak with medical personnel at the detention center. He has lost almost seven kilograms (15 pounds), she said.

In his court appearance, Ghosn gave a forceful rebuttal to the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are merit-less. An indictment in Japan allows prosecutors to lay formal charges, a step that takes them close to trial. Since Ghosn’s initial arrest, prosecutors have repeatedly extended his detention and re-arrested him over new allegations.

Japan’s prosecutors have faced criticism for a lack of clarity and communication on how they are handling the case, with Ghosn held in detention without charge for longer than would be permitted in the UK for a suspected terrorist. If and when Ghosn will be out on bail, his movements are likely to be restricted to his home or a hotel, and he will need a court permission to leave the country, legal experts have said.

If proven, each of Ghosn’s alleged offense may carry a sentence of as much as 10 years, prosecutors have said. Nissan has also accused Ghosn of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract. The prosecutors have not officially charged him over these allegations.

At the court, Ghosn said his actions were backed by managers inside the company as well as external lawyers. For example, his retirement payments were reviewed by legal experts inside Nissan as well as independent lawyers, and showed no intention of breaking the law.

Another accusation — that he rolled personal investment losses onto Nissan — came to no cost to the company, Ghosn said. All told, Ghosn said he always acted with integrity and had never been accused of any wrongdoing in his professional career.

Ghosn has been widely credited with saving Nissan from failure in the late 1990s and bringing it together with Renault. His arrest came after a months-long investigation by Nissan into his conduct, a probe that was largely kept from its French partner. That lack of transparency and concern that Nissan will use Ghosn’s absence to push for more power within the alliance has heightened tensions between the two automakers.

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