TOKYO -- Carlos Ghosn's lawyer slammed what he called Japan's "hostage justice" system after prosecutors arrested the former Nissan chairman for a fourth time and jailed him once again, this time on charges of allegedly diverting millions of dollars from Nissan to personal use.
Prosecutors arrested Ghosn following an early morning raid at his Tokyo residence Thursday, escalating the legal jeopardy facing the former chairman of the Renault, Nissan, Mitsubishi alliance and potentially blocking plans to tell his side of the story in a news conference.
In their public filing, prosecutors said they arrested Ghosn on breach of trust suspicions for allegedly causing some $5 million in damages to Nissan from December 2015 through July, while Ghosn was CEO and chairman of the Japanese automaker.
The sweep landed Ghosn, 65, back in the Tokyo detention center where he spent 108 days following his initial arrest Nov. 19, lawyer Junichiro Hironaka said.
Ghosn was free for less than a month. He was released on bail March 6.
Ghosn, who holds French, Lebanese and Brazilian citizenship, called on the French government for help, Reuters reported. "I am innocent," Ghosn said in an interview aired on Thursday with French TV stations TF1 and LCI. "I call on the French government to defend me, and to defend my rights as a citizen."
Hironaka said there was no reason to detain his client again, following the court's decision to release him on bail. In doing so, the court had already confirmed Ghosn poses no risk of flight or evidence tampering, Hironaka said at hastily called news conference Thursday afternoon.
The arrest, he said, was carried out to increase pressure on Ghosn to cave and to strip him of evidence and documentation as the defendant prepares for trial.
During the raid, investigators vacuumed up notebooks, phones and other materials, Hironaka said. They even took the passport and cellphone of Ghosn's wife, who was with him at the time.
"We cannot deny the possibility that the re-arrest was done for the purpose of taking these materials," he said. "As a civilized country this is something that must not be accepted."
"Using this re-arrest to put pressure on the defendant is hostage justice," he said.
The arrest came just a day after Ghosn took to Twitter to say he would hold a press conference on April 11. That plan was now up in the air, Hironaka said.
"The meaning of the arrest, for prosecutors, is to pressure Mr. Ghosn, keep him under control and stop him from speaking freely," Hironaka said.
Planning ahead
Yet, Hironaka also planned ahead. Before Ghosn’s arrest, his team made a video recording of Ghosn telling his side of the story. That will be made public in due time, Hironaka said.
It was unclear how long Ghosn would be in detention this time.
Under Japanese law, prosecutors can hold a suspect for 48 hours without charge. After that, prosecutors can extend the detention for up to 20 more days, with court approval.
Ghosn denied any wrongdoing and vowed he "would not be broken."
"My arrest this morning is outrageous and arbitrary," Ghosn said in a statement.
"It is part of another attempt by some individuals at Nissan to silence me by misleading the prosecutors. Why arrest me except to try to break me? I will not be broken," he said.
"I was scheduled to present my story in a press conference next week; by arresting me again, the prosecutors have denied me that opportunity, for now, but I am determined that the truth will come out. I am confident that if tried fairly, I will be vindicated."
The latest arrest focuses on allegations Ghosn diverted company money for personal gain.
In their public filing, prosecutors said Ghosn arranged to have some $15 million transferred from a wholly-owned Nissan subsidiary to a bank of an overseas sales representative.
Prosecutors allege that Ghosn then received a portion of those funds for his personal use through a bank account of a third company where his wife works.
Prosecutors said $5 million of the transfers from Nissan was diverted to Ghosn's personal use, and they allege the same amount of financial damage was incurred to Nissan.
"This time, the money was transferred from a Nissan wholly-owned subsidiary and wound up returning to him. So, he did this for his own benefit," Deputy Prosecutor Shin Kukimoto said.
Prosecutors did not identify the companies involved.
Internal probe
But the charges seem to stem partly from Nissan's internal investigation of suspect dealings.
That Nissan investigation that found Ghosn approved payments of around $35 million from Nissan to a distributor in Oman between 2011-18.
The disbursements went to Suhail Bahwan Automobiles, which is run by billionaire Suhail Bahwan, a friend of Ghosn's, according to someone familiar with the matter.
The company distributes Nissan vehicles in the region.
Nissan's probe found some evidence suggesting Suhail Bahwan Automobiles may have supported Ghosn's purchase of a yacht and helped finance a company owned by Ghosn's son.
Japanese prosecutors suspect Ghosn paid Suhail Bahwan Automobiles out of his CEO Reserve, a special fund for ad hoc expenses. The disbursements were marked as marketing expenses, but prosecutors suspect they were channeled into personal use for such things as the purchase of a yacht and a 3 billion yen ($26.9 million) personal loan to Ghosn.
The funds were allegedly channeled through a company where Ghosn's wife works.
In a January jailhouse interview with Japan's Nikkei, Ghosn said the CEO Reserve is "not a black box" and that other corporate officers signed off on the payments.
Prosecutors have already slapped Ghosn with three indictments, two for allegedly misreporting tens of millions of dollars in deferred compensation and a third concerning alleged breach of trust.
He faces up to 15 years in prison if found guilty.
In the first two indictments, Ghosn is charged with falsifying company financial filings to hide some $80 million in deferred compensation.
Ghosn's breach-of-trust charge allege that he temporarily shifted 1.85 billion yen ($16.5 million) in personal swap contract losses to Nissan and had Nissan pay $14.7 million out of the CEO Reserve to a business associate who allegedly helped Ghosn clear the red ink.
Prosecutors deemed the new allegations completely different, necessitating a fresh charge. And because it is different, they also said there was the danger of evidence tampering.
"This is a separate case from the one he has been bailed for," Kukimoto said.
"The people involved are different, and the purposes are different as well. That's why we have made a new decision for this re-arrest."
Nissan will hold an extraordinary shareholder meeting April 8 to remove from the automaker's board Ghosn and Greg Kelly, the American director who was indicted as his alleged conspirator.
Ghosn was removed as chairman shortly after his arrest, and both men were stripped of their roles as representative directors, with special rights to sign financial agreements on behalf of the company. But only shareholders can vote them off the board.
