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Carlos Ghosn May Soon Be Granted Bail but His Problems Are Far from Over. Here’s Why

A Japanese court has denied prosecutors’ request to continue holding Carlos Ghosn and Greg Kelly in jail while authorities investigate charges of financial misconduct at Nissan (NSANY), paving the way for them to be released on bail.

The two were held for nearly a month before officially being charged on Dec. 10. Ghosn’s lawyers said they plan to apply for bail, and that he could be out as soon as Friday if the request is approved, Bloomberg reports.

Prosecutors accuse Ghosn and Kelly of underreporting Ghosn’s compensation in securities filings from 2010 to 2017 by nearly 10 billion yen ($90 million). The maximum punishment in Japan for filing a false financial statement is up to 10 years in prison and a fine of up to 10 million yen ($89,000). Nissan itself faces a fine of up to 700 million yen ($6.2 million).

Reuters reported yesterday it saw documents showing that senior executives at Renault-Nissan were trying to find ways as far back as 2010 to pay Ghosn part of his salary without having to publicly disclose the amount. Just Monday, Nissan’s board decided to update its corporate governance rules so that the board rather than the chairman determines executive pay.

A trial in Japan typically takes place about 40 to 50 days after indictment. With Japan’s bail process, it’s uncertain whether they will be let out of jail before the new year, Kana Sasakura, a criminal law professor at Konan University in Kobe, told CNN. Releasing them before trial would make it easier for their lawyers to prepare a defense, she added, but it depends on the judge hearing their bail applications.

Nobuo Gohara, a lawyer and former prosecutor, told Bloomberg the chances of bail were very high. “To begin with, this isn’t a case that should need such a lengthy detention,” he stated. Prosecutors are likely to contest any bail, however, and even if it’s granted, Ghosn is likely to be restricted to his home or a hotel, and need permission to exit the country.

Under Japanese law, the men are unable to communicate with their family or foreign lawyers while in jail, the New York Times reports. Meanwhile, prosecutors question them daily.

In a video given yesterday to the Wall Street Journal, Donna “Dee” Kelly said her husband was the victim of a boardroom coup and was lured to Tokyo despite plans for spinal surgery in the U.S. “Greg has been wrongly accused as part of a power grab by several Nissan executives headed up by the current CEO, Saikawa,” she says in the video.

Ghosn was removed as chairman of Nissan and Mitsubishi Motors (MMTOF) after his arrest and temporarily replaced as head of Renault (RNSDF). Ghosn’s arrest followed a months-long internal investigation at Nissan, of which he was apparently unaware. The accusations have put his planned fusion of Nissan and Renault on ice.

Nissan CEO Hiroto Saikawa, considered a driving force in the Ghosn investigation, was in Amsterdam Tuesday for a meeting on the alliance between Nissan, Renault and Mitsubishi. His one-on-one meeting with Renault interim chief Thierry Bollore was “positive” and “productive,” Bloomberg reports.