Ghosn release on bail in doubt as prosecutors appeal

TOKYO – The Tokyo District Court has approved bail for indicted former Renault-Nissan Chairman Carlos Ghosn, who has been held in detention since his Nov. 19 arrest in Japan.

The decision came Tuesday in Japan, following the third attempt to win release of the 64-year-old Ghosn after 107 days in detention. The court set bail at 1 billion yen ($8.9 million). 

It was unclear when Ghosn might walk free. The Tokyo District Prosecutor’s Office, as expected, appealed the decision within hours. The authorities didn’t release the reason for their appeal. Prosecutors also can arrest Ghosn on new charges to ensure he stays incarcerated ahead of his trial.

At the very least, the prosecutors’ appeal means Ghosn likely won’t be released Tuesday, said Stephen Givens, a law professor at Sophia University in Tokyo.

To get his bail application approved, Ghosn agreed to stay in Japan, have cameras set up in his house and not contact people outside.

“We are very glad our bail request has been approved,” Ghosn’s lawyer, Junichiro Hironaka, said earlier by phone. “The bail conditions are severe, but we will make sure to comply with them.”

Ghosn switched lawyers late last month after his first legal team failed in two attempts to win bail. The court had refused bail citing concerns about flight and evidence tampering. 

Ghosn’s new lawyers reapplied for bail last week. In a Monday news conference, attorney Junichiro Hironaka said the new bail application offered stricter conditions, such as limitations on his exchange of information with other people and implementing a camera surveillance system. 

After approving bail, the Tokyo District Court outlined the conditions for Ghosn’s release, including a restriction on overseas travel and a requirement to reside in Japan. It also said there were other conditions to prevent flight and the destruction of evidence, without giving details.

Hironaka -- nicknamed The Razor for his record of high-profile acquittals -- expressed optimism that Ghosn would be released “in the near future” so he could prepare for trial.

He said he presented new arguments for why there is no danger of Ghosn fleeing Japan or tampering with evidence. “We will be going forward with a new legal strategy,” he said.

“I’m now 73 years old, but I want to test how sharp The Razor still is,” Hironaka said.

Following the court’s decision, a secretary for Hironaka’s law firm said the defense team would not comment on the matter.

In a January jailhouse interview with French media, Ghosn complained that his confinement severely handicapped his ability to mount a defense and prepare for trial. 

Hironaka has said trial could still be months away -- possibly beginning after the summer -- raising the prospect of many more months in jail, if Ghosn were unable to win bail. 

Ghosn faces three indictments on allegations of financial misconduct at Nissan and is entering a fourth month in a Tokyo jail following his Nov. 19 arrest. 

Ghosn denies all charges. If found guilty, he faces up to 10 years in prison.

Mounting pressure

Approval of Ghosn’s bail comes amid mounting international pressure on Japan and criticism of judicial practices many say are out of step with international norms. 

Before indictment, suspects can be held for weeks without charge and subjected to lengthy interrogation by prosecutors in the absence of their attorneys. 

The high bar for bail is seen as pressuring confessions from those who maintain their innocence.

Hironaka slammed Japan’s system as one of “hostage justice” and said the country’s handling of Ghosn’s case would affect Japan’s standing in the court of international opinion. 

Ghosn's French lawyers also submitted a dossier to the United Nations' human rights office in Geneva that they say shows Ghosn's rights had been violated during detention in Japan.

Ghosn’s co-defendant, Greg Kelly, was released on bail Dec. 25. An American director at Nissan, Kelly is accused of helping Ghosn falsify company financial filings to hide some $80 million in deferred compensation. Kelly, who is restricted from leaving Japan, also denies the charges.

Ghosn faces a separate indictment for breach of trust. That charge alleges he temporarily shifting ¥1.85 billion ($16.5 million) in personal swap contract losses to Nissan and having Nissan pay $14.7 million to a business associate who allegedly helped Ghosn handle the red ink.

In the first interview after his arrest, Ghosn told the Nikkei in January that he had “no doubt” his arrest was the result of “plot and treason” by Nissan executives opposed to his plan to merge Nissan and Renault. He said he planned to combine them in a 50-50 holding company.

Nissan CEO Hiroto Saikawa, in a separate interview last week with Shukan Bunshun, acknowledged there was mounting resistance inside Nissan to Ghosn’s overtures about merging the management of the two companies.

Ghosn began raising the idea in February 2018, Saikawa said. Even though Saikawa repeatedly objected to the proposal, Ghosn and Kelly continued to push for it.

Nissan resistance

But Saikawa said his own resistance to any management integration between Renault and Nissan had nothing to do with the charges of financial malfeasance leveled against Ghosn.

That investigation, he said, had begun separately in early 2018, without Saikawa’s knowledge. Saikawa said he learned about the allegations only in October, a month before Ghosn’s arrest.

“The arrest and clash of opinions over management integration are two separate things,” he said. “When I was first notified of this fraud, the internal investigation was already underway. Most of his misconduct is serious enough to warrant immediate dismissal for an ordinary executive. The arrest is entirely a different dimension from talk of management integration.”

Nissan spokesman Nicholas Maxfield said the company could not comment on the court’s decision but reiterated the Nissan’s allegations of malfeasance against Ghosn.

“The sole cause of this chain of events is the misconduct led by Ghosn and Kelly,” he said. “Aside from any criminal investigation, Nissan's internal investigation has uncovered substantial evidence of blatantly unethical conduct, resulting in a unanimous board vote to discharge Ghosn and Kelly as chairman and representative director.”

Nissan says it has uncovered further misconduct by Ghosn since November. It maintains that its current focus is on improving corporate governance to prevent repeated misconduct. 

Bloomberg contributed to this report.