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Abu Dhabi, UAESunday 21 April 2019

Ghosn's lawyer slams prosecutors after fourth arrest of ousted executive

UPDATE: Renault passes 'new elements' of internal inquiry to French authorities as Junichiro Hironaka condemns former Nissan chief's re-arrest

Former Nissan and Renault chairman Carlos Ghosn has been arrested for the fourth time. EPA
Former Nissan and Renault chairman Carlos Ghosn has been arrested for the fourth time. EPA

Renault's internal probe into allegations of financial wrongdoing by the French car maker's former chief Carlos Ghosn has revealed "new elements" that have been passed on to the authorities, French Finance Minister Bruno Le Maire said on Thursday.

"There are new elements that emerged within the framework of the probe that I asked for a few weeks ago. These elements have been passed onto the judiciary and the judiciary will evaluate these elements," Mr Le Maire told the BFM news channel, hours after Mr Ghosn was rearrested in Japan.

"I tell you that I have asked for total transparency. We owe this to our compatriots," Mr Le Maire said, noting that he had last year asked for a detailed internal probe from Renault.

Mr Le Maire insisted that he wanted to "throw every light on the previous corporate governance at Renault".

Pressed on Mr Ghosn's latest arrest in Japan, Mr Le Maire insisted that the tycoon "was equal before the law like any other" and "should benefit from the presumption of innocence and consular protection".

The lawyer representing the ousted Nissan chairman, arrested for the fourth time on Thursday, spoke out against prosecutors, criticising them for being excessive in their pursuit of the fallen executive.

Junichiro Hironaka said the rearrest was “extremely inappropriate”.

Junichiro Hironaka, lawyer for former Nissan chief Carlos Ghosn speaks to journalists outside his office in Tokyo on April 4, 2019. Former Nissan chief Carlos Ghosn was rearrested on April 4 in Tokyo on fresh financial misconduct allegations, with the auto tycoon slamming his detention as "outrageous and arbitrary". - Japan OUT / AFP / JIJI PRESS / JIJI PRESS
Junichiro Hironaka, lawyer for Carlos Ghosn. AFP

Japanese prosecutors now accuse Mr Ghosn of trying to enrich himself to the tune of $5 million over a two-and-a-half-year period to July 2018, in breach of his legal duties to Nissan.

The latest arrest, which national broadcaster NHK described as a highly unusual move for someone who has already been released on bail, marks the latest dramatic twist in the once-feted car chief's fall from grace.

More than a dozen officials from the Tokyo prosecutor's office visited his residence early on Thursday and asked him to submit to questioning, NHK said. A silver van believed to be carrying Mr Ghosn later left the residence, it said.

Footage of the vehicle leaving the residence showed its windows covered with curtains, making it impossible to see who was riding inside.

epa07483856 Carlos Ghosn (R), former Nissan and Renault chairman, leaves his residence in Tokyo, Japan, 03 April 2019 (issued 04 April 2019). In the early morning of 04 April, Tokyo prosecutors re-arrested Carlos Ghosn for the fourth time for alleged wrong use of the carmaker's funds. EPA/JIJI PRESS JAPAN OUT EDITORIAL USE ONLY/ NO ARCHIVES NO ARCHIVES NO ARCHIVES NO ARCHIVES
Mr Ghosn (R), leaves his residence in Tokyo, Japan. EPA

The Kyodo news agency reported that the latest charges involved the shifting of funds through a dealer in Oman to the account of a company Mr Ghosn effectively owned. The agency did not cite any sources.

"My arrest this morning is outrageous and arbitrary," Mr Ghosn said in a statement issued by a US-based spokesman.

"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. I am innocent of the groundless charges and accusations against me."

Under the Japanese legal process, prosecutors have 48 hours to detain suspects, after which they can make a 10-day detention request. That can be extended another 10 days by filing a second request to the court. Those procedures, along with additional arrests, can keep suspects in detention for months at a time.

No one was immediately available for comment at the Tokyo prosecutors' office.

“The way the prosecutors took him to question and rearrest was a bit rough,” Koji Endo, an analyst at SBI Securities, told Bloomberg. “The rearrest seems like they wanted to block the news conference.”

The arrest comes just a day after Mr Ghosn pledged on Twitter that he would hold a news conference on April 11 to "tell the truth" about the allegations against him.

"After being wrongly imprisoned for 108 days, my biggest hope and wish today is for a fair trial," Mr Ghosn added in the statement issued by the US spokesman.

"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."

Mr Ghosn was first arrested in Tokyo in November and faces charges of financial misconduct and aggravated breach of trust over allegedly failing to report around $82m in salary and temporarily transferring personal financial losses onto Nissan's books during the financial crisis.

Released on $9m bail on March 6, Mr Ghosn says he is the victim of a boardroom coup.

Former Nissan Motor Chairman Carlos Ghosn leaves his lawyer's office in Tokyo, Japan in this photo taken by Kyodo April 3, 2019.Picture taken on April 3, 2019. Mandatory credit Kyodo/via REUTERS TPX IMAGES OF THE DAY ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. MANDATORY CREDIT. JAPAN OUT. NO COMMERCIAL OR EDITORIAL SALES IN JAPAN.THIS IMAGE WAS PROCESSED BY REUTERS TO ENHANCE QUALITY, AN UNPROCESSED VERSION HAS BEEN PROVIDED SEPARATELY.
Mr Ghosn leaves his lawyer's office in Tokyo, Japan, Reuters

Sources told Reuters this week that French car maker and Nissan partner Renault had alerted French prosecutors after uncovering suspect payments to a Renault-Nissan business partner in Oman while Mr Ghosn was chief executive of the French car maker.

Mr Ghosn's spokesman has previously said payments of $32m made over nine years were rewards for the Oman firm being a top Nissan dealer. Such dealer incentives were not directed by Mr Ghosn and the funds were not used to pay any personal debt, the spokesman said.

Nissan had previously established its own regional subsidiary made questionable payments of more than $30m to the Oman distributor, Suhail Bahwan Automobiles (SBA).

Evidence sent to French prosecutors late last week showed that much of the cash was subsequently channelled to a Lebanese company controlled by Mr Ghosn associates, the sources said.

Reuters has not been able to reach SBA for comment on the matter.

The board of Renault moved to scrap Mr Ghosn's pension worth about €770,000 (Dh3.1m) annually, three sources said on Wednesday.

Directors also recommended that shareholders block a further €224,000 in Mr Ghosn's variable pay for 2018, two sources told Reuters, following a meeting that also approved governance changes reducing the size of the board to 18 members from 20.

Another lengthy stay in prison could make it harder for Mr Ghosn to prepare for his trial on charges of financial misconduct, and refocus international attention on Japan’s criminal justice system.

A Paris-based spokeswoman for the Ghosn family denied any wrongdoing by Mr Ghosn and said reports of Oman payments, use of an aircraft and the start-up are part of a smear campaign to make the former executive look greedy.

The November arrest of the car titan destabilised a three-way alliance between Nissan, Renault and Mitsubishi. Then, last month, the car makers announced a new governance structure designed for smoother and more equitable decision-making. Another re-arrest is unlikely to impact the manufacturers, but could put Nissan and Renault under closer scrutiny, because of their involvement in the payments.

Nissan declined to comment on the arrest, issuing its usual response regarding Mr Ghosn. “Nissan’s internal investigation has uncovered substantial evidence of blatantly unethical conduct,” said Nicholas Maxfield, a spokesman for the Yokohama-based car maker.

“Further discoveries related to Ghosn’s misconduct continue to emerge.”

Updated: April 4, 2019 12:48 PM

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