Nissan Chairman Carlos Ghosn. File picture: Kin Cheung / AP Photo.
Nissan Chairman Carlos Ghosn. File picture: Kin Cheung / AP Photo.

Ghosn facing another 10 days in detention - report

By Yuri Kageyama Time of article published Nov 21, 2018

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Tokyo - Nissan chairman Carlos Ghosn will be detained for another 10 days following his arrest on suspicion of falsifying income reports by millions of dollars and misusing company assets for personal gain, Japanese media reported on Wednesday.

The board of Nissan is set to decide this week whether to dismiss Ghosn and the company's representative director Greg Kelly, who was also arrested on Monday on suspicion of collaborating in the wrongdoing.

Their detention was extended on Wednesday for another 10 days, Kyodo News service reported. The Tokyo District Court, cited in the report, declined to comment.

Under Japanese law, suspects can be held for 20 days per possible charge without getting an official indictment. Additional charges can be tagged on, resulting in longer detentions. Neither Ghosn nor Kelly has been charged so far.

Ghosn is being suspected of falsifying securities statements and underreporting $44.6 million (R624m) in income from 2011 to 2015, and Kelly was suspected of collaborating with him, according to Tokyo prosecutors.

The maximum penalty, upon conviction for violating the financial laws, the suspected allegation, is 10 years in prison, a 10 million yen fine, or both.

Despite the high-profile arrests, analysts said the impact on Nissan vehicle sales was expected to be minimal.

"I'd be surprised if it impacts car sales very much," said Christopher Richter, auto analyst for CLSA Securities Japan. "Consumers are discerning enough to say: This car, the wheels might fall off so I'm not going to buy it. This car company, the executive might have done something kind of dodgy, but do I like the car or not."

Richter noted sales dips that hit after previous Nissan scandals had been temporary. The deviations the automaker acknowledged in those scandals were more directly related to product quality, such as mileage, emissions and plant inspections.

Whatever executives might, or might not, have been doing were apt to influence a car purchase less, Richter said.

Renault SA of France, a partner since the late 1990s, now with a 43 percent stake in Nissan, retained Ghosn as chief executive in an emergency board meeting Tuesday, while naming an interim in his place. Renault's board also is requesting Nissan pass along details of its investigation.

From the start, Nissan has sought to distance itself from the arrests.

Chief Executive Hiroto Saikawa denounced Ghosn and Kelly as "the masterminds," and made clear he thought they should be removed at Thursday's board meeting.

When Saikawa was asked how such actions could have gone undetected for five years, perhaps longer, he blamed a murky system of checks and balances at Nissan and stressed that power had been too focused with Ghosn.

Nissan's overall performance won't be hurt by the absence of Ghosn, "as long as the executive team pulls together," said Janet Lewis, an analyst at Macquarie Research.

The fact the case was initially brought to attention by a whistleblower underlined how the system was working, she said.


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