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Nissan’s Ghosn to Spend at Least 10 More Days in Custody Nissan’s Ghosn to Spend at Least 10 More Days in Custody
(about 4 hours later)
TOKYO — Carlos Ghosn, one of the global auto industry’s most powerful and admired leaders, will spend another 10 days in the custody of Japanese authorities, as his remarkable tumble from the top of the world’s biggest car-making empire continues. TOKYO — Carlos Ghosn, one of the world’s most powerful car industry leaders, will be detained for 10 more days as prosecutors investigate accusations of financial misconduct against him, and French and Japanese officials prepare to meet over the case.
Japanese prosecutors arrested Mr. Ghosn, chairman of Nissan Motor, two days ago, when they boarded his corporate jet shortly after it landed in Tokyo’s Haneda airport. He has yet to be charged with a crime. Japanese prosecutors arrested Mr. Ghosn, who oversaw an alliance between Nissan, Renault and Mitsubishi, Monday on his corporate jet shortly after it landed at Tokyo’s Haneda airport. He has yet to be charged with a crime.
Despite that, his time in confinement could continue for several more weeks. Under Japanese law, prosecutors can detain suspects for a total of 23 days without charging them with any crime. While being held, he is likely to live in spare conditions. Even a request for extra blankets would have to go through his lawyers. Mr. Ghosn’s detention could last several more weeks. Under Japanese law, prosecutors can hold suspects for up to 23 days without filing charges. While he is held, Mr. Ghosn is likely to live in spare conditions. Even a request for extra blankets would have to go through lawyers.
“There will be no special treatment for Ghosn,” said Tsutomu Nakamura, a former prosecutor and now a private defense lawyer who is not involved with Mr. Ghosn’s situation. “He will be treated in the same way as a burglar.” “There will be no special treatment” for Mr. Ghosn, said Tsutomu Nakamura, a former prosecutor in Japan who is now a private defense lawyer with no role in the case. “He will be treated in the same way as a burglar.”
The extended inquiry adds to a dramatic and sudden fall. Mr. Ghosn created an alliance between Nissan, Renault, the French corporate icon, and Mitsubishi Motors, another Japanese auto company, making the global empire the world’s largest maker of cars. The extended inquiry adds to the drama surrounding Mr. Ghosn’s sudden arrest, which shocked an industry facing challenges amid a global trade war, slowing economies and rapid changes in automotive technology.
The arrest followed an internal company inquiry that found Mr. Ghosn, together with Greg Kelly, a onetime Nissan human resources manager and current board member, had underreported Mr. Ghosn’s compensation to the Japanese government for several years. The case has riveted Japan, home to Nissan and Mitsubishi and a country where Mr. Ghosn has long been admired. In France, where Renault employs 47,000 workers, the case against Mr. Ghosn, the carmaker’s chairman and chief executive, has unleashed similar intrigue.
According to the Tokyo prosecutors’ office, Mr. Ghosn and Mr. Kelly underreported Mr. Ghosn’s compensation between 2011 and 2015 by more than 5 billion yen ($44.5 million) — understating his true earnings by half — in reports to a bureau of Japan’s Ministry of Finance. At a news briefing on Wednesday, Bruno Le Maire, France’s finance and economy minister, said that his Japanese counterpart, Hiroshige Seko, would fly to Paris for a meeting on Thursday to discuss the alliance between Renault and Nissan. The two men spoke by phone on Tuesday.
The prosecutors’ office did not answer questions about where exactly Mr. Ghosn or Mr. Kelly are being held. But Mr. Nakamura, the former prosecutor, said they were likely being held in a detention center in eastern Tokyo. A spokeswoman for Mr. Le Maire said he was likely to seek information about Nissan’s allegations against Mr. Ghosn. Mr. Le Maire had previously said there was no evidence that Mr. Ghosn engaged in wrongdoing in France, but that under the circumstances he had to step down temporarily from his role at Renault.
Even after 23 days, Japanese law permits prosecutors to rearrest suspects on suspicion of other crimes and extend their detention periods for further questioning. The arrest on Monday came after an internal Nissan inquiry that found Mr. Ghosn and Greg Kelly, a onetime Nissan human resources manager and current member of the company’s board, had underreported Mr. Ghosn’s compensation to the Japanese government for several years.
“It’s pretty common in Japan to detain suspects for a long time,” Mr. Nakamura said. “This is very different from the Western criminal justice system.” The Nissan board is to meet Thursday in Japan. Hiroto Saikawa, the carmaker’s chief executive, has said the company is recommending that the board remove Mr. Ghosn and Mr. Kelly from their posts. Mitsubishi said it would also seek to remove Mr. Ghosn as its chairman at a board meeting set for next week.
Suspects are usually held in 50-square-foot rooms where they sleep on the floor on futons. They are allowed a limited set of clothes, said Mr. Nakamura, but no long socks, which could be used by suspects who try to commit suicide. NHK, Japan’s public broadcaster, showed footage of Toshiyuki Shiga, Nissan’s former chief operating officer and a current member of the board, entering the Tokyo prosecutors’ office as part of the inquiry. He told reporters that he was submitting to questioning voluntarily.
These are not the kinds of circumstances to which Mr. Ghosn is accustomed. He kept homes in Paris, Amsterdam, Beirut and Rio de Janeiro; circled the globe on a corporate jet; collected contemporary art, invested in wineries and, in 2016, rented out Versailles for his wedding to his second wife, Carole. According to the Tokyo prosecutors’ office, Mr. Ghosn and Mr. Kelly underreported Mr. Ghosn’s compensation from 2011 to 2015 by more than 5 billion yen ($44.5 million) — understating his true earnings by half — in reports to a bureau of Japan’s Ministry of Finance.
In detention he will not even be allowed to host family visitors. Foreign suspects are allowed to see their lawyers and receive representatives from embassies. The prosecutors’ office declined to answer questions about where Mr. Ghosn or Mr. Kelly were being held. Mr. Nakamura, the former prosecutor, said they were probably at a detention center in eastern Tokyo.
Laurent Pic, the French ambassador to Japan, visited Mr. Ghosn, a French citizen who is also chairman and chief executive of Renault, in detention on Tuesday. Landry Pierrefitte, deputy press counselor for the French Embassy in Tokyo, said he could not comment on Mr. Ghosn’s health or mental state. “It’s pretty common in Japan to detain suspects for a long time,” Mr. Nakamura said. “This is very different from the Western criminal justice system.” Even after 23 days, Japanese law permits prosecutors to rearrest suspects on suspicion of other crimes and detain them for extended periods.
In a statement, the United States Embassy in Tokyo said that “due to privacy concerns,” it could not comment on whether any diplomatic staff had visited Mr. Kelly. Suspects are usually held in 50-square-foot rooms where they sleep on futons on the floor. They are allowed a limited set of clothes, Mr. Nakamura said. Long socks, which can be used to attempt suicide, are not allowed.
During a news conference at Nissan’s headquarters in Yokohama on Monday, Hiroto Saikawa, Nissan’s chief executive, said the company is recommending that the board remove both Mr. Ghosn and Mr. Kelly from their posts. The board will meet Thursday to make a decision. Mitsubishi has also recommended that Mr. Ghosn be removed as chairman, and its board will meet next week. Such spartan circumstances would be a departure for Mr. Ghosn. He has kept homes in Amsterdam, Beirut, Paris and Rio de Janeiro; circled the globe on a corporate jet; collected contemporary art; invested in wineries and, in 2016, rented out Versailles for his wedding to his second wife, Carole.
NHK, the public broadcaster, showed footage of Toshiyuki Shiga, Nissan’s former chief operating officer and a current board member, entering the Tokyo prosecutors’ office. He told reporters that he was voluntarily submitting to questioning. While being held, he is not even allowed visits with family members. Criminal suspects not from Japan like Mr. Ghosn, a citizen of France and Lebanon, can see their lawyers and representatives from embassies.
Under a criminal justice reform law that went into effect in June of this year, prosecutors can offer immunity to suspects in certain cases involving financial, drug or firearm crimes if they pass on information about criminal activity committed by third parties. Laurent Pic, France’s ambassador to Japan, visited Mr. Ghosn in detention on Tuesday. Landry Pierrefitte, deputy press counselor for the French Embassy in Tokyo, declined to comment on Mr. Ghosn’s health or mental state.
In a statement, the United States Embassy in Tokyo said that “due to privacy concerns,” it could not comment on whether members of its diplomatic staff had visited Mr. Kelly.
Under a change to Japanese criminal law that took effect in June, prosecutors can offer immunity to suspects in certain cases involving financial, drug or firearm crimes in exchange for information about criminal activity committed by third parties.
Nissan said it was cooperating with the inquiry.Nissan said it was cooperating with the inquiry.
”Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with its investigation,” said Nicholas Maxfield, a Nissan spokesman. “We will continue to do so.” “Nissan has been providing information to the Japanese public prosecutors office and has been fully cooperating with its investigation,” Nicholas Maxfield, a Nissan spokesman, said. “We will continue to do so.”
Analysts criticized both Mr. Saikawa and Nissan’s board for not having detected the false reporting earlier. Analysts criticized Mr. Saikawa and the Nissan board for failing to detect the false reporting earlier.
“It seems like there were complaints against Ghosn within the company,” said Takashi Inoue, chief executive of Inoue Public Relations. Mr. Saikawa “is responsible for missing the false reporting.” “It seems like there were complaints against Ghosn within the company,” said Takashi Inoue, chief executive of Inoue Public Relations. Mr. Saikawa, he added, “is responsible for missing the false reporting.”
Mr. Inoue said other executives within Nissan may have been jealous of Mr. Ghosn, whose pay was much higher than anyone else in the company. As chairman of Nissan last year, Mr. Ghosn reported income of ¥735 million ($6.5 million) while Mr. Saikawa was paid ¥499 million ($4.4 million) as chief executive. Mr. Inoue said other Nissan executives may have been jealous of Mr. Ghosn, who was paid was much more than anyone else at the company. As Nissan’s chairman last year, Mr. Ghosn reported income of ¥735 million ($6.5 million) while Mr. Saikawa was paid ¥499 million ($4.4 million) as chief executive.
Some analysts said Mr. Ghosn’s pay may have triggered an outsize response to the alleged financial misconduct. Some analysts said that Mr. Ghosn’s compensation may have prompted an outsize response to the alleged financial misconduct.
“Japanese media seems to be playing the ire of the public against large compensation of C.E.O.s to support the charge, but the inequality in compensation between ordinary workers and C-class managers are moral issues, not criminal issues,” said Takuji Okubo, managing director and chief economist at Japan Macro Advisors in Tokyo, referring to positions like chief executive and chief financial officer.“Japanese media seems to be playing the ire of the public against large compensation of C.E.O.s to support the charge, but the inequality in compensation between ordinary workers and C-class managers are moral issues, not criminal issues,” said Takuji Okubo, managing director and chief economist at Japan Macro Advisors in Tokyo, referring to positions like chief executive and chief financial officer.
“This dramatic arrest does seem excessive for what he has been alleged to have done. If he evaded a huge amount of tax to the authorities, the arrest would be justified.” But given that the allegations are that he had not declared income to corporate regulators, Mr. Okubo said, “I think this seems excessive.” “This dramatic arrest does seem excessive for what he has been alleged to have done,” he continued. “If he evaded a huge amount of tax to the authorities, the arrest would be justified.” But, Me. Okubo said, given that the allegations involve not declaring income to corporate regulators, “I think this seems excessive.”
There is no current allegation that Mr. Ghosn did not pay appropriate taxes on his income.There is no current allegation that Mr. Ghosn did not pay appropriate taxes on his income.
Renault, the French carmaker that owns a 43 percent stake in Nissan, appointed a temporary leadership team on Tuesday to fill the gap left by the arrest of Mr. Ghosn, but has said that Mr. Ghosn remains chairman and chief executive. Renault, which owns a 43 percent stake in Nissan, appointed a temporary leadership team on Tuesday to fill the gap created by Mr. Ghosn’s arrest, but has said that he remains chairman and chief executive.
The French government, which is Renault’s biggest shareholder, was taking a cautious stance. The economy minister, Bruno Le Maire, said on Tuesday that France had no evidence of the crimes that Mr. Ghosn has been accused of committing in Japan, and would not call for his removal from the board of Renault.
Still, Mr. Le Maire said Mr. Ghosn was “no longer in a position capable of leading Renault” because of his troubles in Japan. Renault has described Mr. Ghosn as “temporarily incapacitated.”