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April 04, 2019 01:51 AM

Ghosn vows 'I will not be broken' after new arrest; asks French gov't to help

Wire reports
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    Legal experts not connected to the Ghosn case described said his latest arrest is very rare for someone already released on bail.

    TOKYO -- The drama surrounding fallen auto executive Carlos Ghosn erupted again, with Japanese prosecutors rearresting him on fresh allegations that he used millions of dollars from Nissan for his own purposes.

    Authorities detained Ghosn early on Thursday on suspicion of aggravated breach of trust, using company money funneled through an intermediary for personal purposes, prosecutors said in a statement.

    They are the most serious charges yet against Ghosn, who had been free on bail for less than a month. Prosecutors showed up at Ghosn's Tokyo apartment shortly before 6 a.m. local time, and a vehicle with covered windows left about an hour later.

    "My arrest this morning is outrageous and arbitrary," Ghosn said in a statement emailed by a U.S.-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."

    Ghosn, who holds French, Lebanese and Brazilian citizenship, called on the French government for help. "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."

    It was not clear where the interview was recorded. France's finance minister said Ghosn must have the presumption of innocence and was getting consular protection.

    Tokyo prosecutors said Ghosn had caused Nissan $5 million in losses over a 2-1/2-year period to July 2018, in breach of his legal duties to the company and with the goal of personal gain.

    The Kyodo news agency reported that the losses involved the shifting of funds through a dealer in Oman to the account of a company Ghosn effectively owned.

    Prosecutors confiscated Ghosn's cell phone, documents, notebooks and diaries, along with Ghosn's wife's passport and cell phone, Ghosn's lawyer Junichiro Hironaka said. An official for the Tokyo prosecutors' office told reporters on Thursday that authorities feared Ghosn would destroy evidence. The official declined to comment when asked about the confiscation of Ghosn's wife's possessions.

    Japanese media said Ghosn had been taken back to the detention center where he was held after being first arrested in November.

    Renault and Nissan have uncovered payments made under Ghosn that allegedly went toward corporate jets, a yacht and his son's startup, leading Renault to alert authorities about potential wrongdoing, people familiar with the matter have said.

    On Wednesday, Renault said Ghosn had made questionable payments to a distributor in the Middle East and an outside lawyer. Some expenses "involve questionable and concealed practices and violations of the group’s ethical principles," Renault said.

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

    Ghosn, who was first arrested Nov. 19 and jailed for more than 100 days, has vigorously denied accusations of transferring personal trading losses to the automaker and under-reporting his income.

    His new arrest on Thursday came just as he was preparing to tell his side of the story. Ghosn had tweeted Wednesday that he planned to hold a news conference on April 11 to "tell the truth" about accusations against him.

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

    Middle East payments

    The Oman-related transactions were revealed in probes and amounted to millions of euros to companies in Oman and Lebanon that may have then been used for the personal benefit of Ghosn and his family, said sources, who asked not to be identified because the details are not public.

    The payments in Oman were to Suhail Bahwan Automobiles, which is Nissan’s exclusive distributor in the sultanate, people with knowledge of the matter have said. Nissan flagged the payments to Renault along with discounts on vehicles to Oman dealerships that the Japanese company suspected as being inflated, according to one of the people.

    Other expenses of several million euros by RNBV, the Amsterdam-based company overseeing a partnership with Nissan, also raise concerns, Renault said. The latest findings may lead to legal action in France, after earlier transactions were brought to authorities, the company said.

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

    Nissan declined to comment on the arrest, issuing its usual response regarding Ghosn. "Nissan's internal investigation has uncovered substantial evidence of blatantly unethical conduct," Nicholas Maxfield, a spokesman for the Yokohama-based automaker, wrote in an emailed statement. "Further discoveries related to Ghosn’s misconduct continue to emerge."

    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.

    "I am determined that the truth will come out," Ghosn said in his statement. "I am confident that if tried fairly, I will be vindicated."

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

    Boomberg and Reuters contributed to this report

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