Nissan’s Carlos Ghosn Indicted on New Financial Misconduct Charges

January 11, 2019, 10:01 AM UTC

Japanese prosecutors on Friday filed new charges of breach of trust and understating compensation against former Nissan chairman Carlos Ghosn, who has been in jail since November on related charges.

Ghosn’s defense lawyers will apply for bail, they told Reuters.

The latest charges are not a surprise: police re-arrested Ghosn on December 21st while in custody and authorities had 23 days in which to bring the new formal indictments. His previous indictments were for under-reporting income from 2011 to 2014. The new ones bring the period up to March 2018 and include additional allegations that he made an improper temporary transfer of an investment to Nissan. He faces a separate charge of breach of trust for $14.7 million in payments made to Saudi businessman Khaled Al Juffali.

Juffali says the payments were for legitimate business reasons.

On Tuesday Ghosn appeared at the first public hearing since his initial arrest. He said that he had disclosed his Nissan payments and sought review from both internal and external lawyers. “I have acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company,” he told the judge. Ghosn added that the temporary investment transfer was related to converting his compensation from yen to dollars and cost Nissan nothing.

Former Nissan representative director Greg Kelly is included in the income misreporting charges, but authorities released him on bail on December 25th.

While both Nissan and Mitsubishi have removed Ghosn from his leadership positions, he remains on Nissan’s board because he must be present for a vote to oust him. He remains chairman of Renault, which Thursday said an investigation of his dealings in 2018 and 2017 found no wrong-doing and that it is now investigating earlier dealings.

Renault, Nissan, and Mitsubishi have an alliance that includes cross-ownership of shares. Ghosn was rumored to be planning to tighten this in Renault’s favor before his ouster.