Carlos Ghosn rejected prosecutor claims of financial wrongdoing in the car titan’s first public comments since his shock arrest in Japan almost two months ago.
“I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations,” the former chairman of Nissan Motor Co., handcuffed and with a rope around his waist, told a Tokyo court on Tuesday. Ghosn’s lawyers said later they plan to appeal his incarceration.
Looking thinner and with sunken cheeks, the dark-suited Ghosn laid out in detail his defense against charges he failed to disclose income from Nissan and passed on trading losses to the carmaker. The allegations have rocked the world’s largest auto partnership and raised questions about the future of the alliance between Nissan, France’s Renault SA and Mitsubishi Motors Corp.
Once feted as Nissan’s savior, Ghosn presented a pale imitation of his old self. The jet-setting manager, who once came to symbolize the Davos Man, appeared to have lost significant weight and his hair was graying at the roots. His business shoes had been replaced by plastic slippers.
But the hearing was Ghosn’s first chance to give his side of the story. He told the court that contrary to accusations made by prosecutors, he got no compensation from Nissan that wasn’t disclosed. Ghosn has been indicted in Japan for under-reporting his compensation and the hearing Tuesday was requested by his lawyers, seeking an explanation for why he has been detained for so long.
“I have acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company,” Ghosn said. “Your Honor, I am innocent of the accusations made against me.” A statement of the remarks he made in court was provided to Bloomberg News.
The charges are related to a relatively arcane point of accounting—whether retirement payments were properly booked. Ghosn said draft proposals for his post-retirement compensation were reviewed by internal and external lawyers at Nissan, showing he had no intention of breaking the law. Another allegation is that Ghosn transferred obligations on his own personal investment losses to Nissan. In his defense, he said he had asked Nissan to take on collateral linked to foreign-exchange forward contracts “as it came to no cost to the company.” The contracts, which were transferred back to him without the carmaker incurring any loss, were struck because the company paid him in yen while he preferred income in U.S. dollars. He helped transform Nissan into a pillar of the Japanese economy, with the revival of icons such as the Fairlady Z. The executive said he always acted with integrity and has never been accused of any wrongdoing in his professional career.
After weeks in jail, the executive’s public defense was highly anticipated: A whopping 1,122 tickets were handed out Tuesday in a lottery to attend Ghosn’s hearing—about 80 times oversubscribed—for the 14 public seats available in the courtroom gallery.
His appearance in court lends a new dimension to a legal battle that has been largely one-sided. Accusations against him have layered up and his confinement has repeatedly been extended. He was re-arrested on fresh charges on Dec. 21, just when it looked like he may be able to apply for bail.
While he was dismissed as Nissan chairman shortly after his detention, Renault has kept him on as chairman and chief executive officer because it needs evidence of wrongdoing.
In his remarks, Ghosn also sought to highlight his loyalty to Nissan and he spoke of “a genuine love and appreciation” for the company. He said four major companies tried to recruit him while he was Nissan CEO. He even named some of the people who reached out to him — Bill Ford at Ford Motor Co., and Steve Rattner, the Obama administration’s car czar at the time, who tapped Ghosn for a position at General Motors Co.
Ghosn turned them down. “Even though their proposals were very attractive, I could not in good conscience abandon Nissan while we were in the midst of our turnaround,” he said in Tuesday’s statement.
Meanwhile, a Saudi partner of Nissan came to the defense of Ghosn after a $14.7 million payment to the Middle Eastern company came under the scrutiny of prosecutors in the probe. The transaction over four years was for legitimate business purposes, the firm said.
If proven, each of Ghosn’s alleged offenses 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.