TOKYO (The Japan News/ANN) — The special investigation squad of the Tokyo District Public Prosecutors Office on Dec. 21 rearrested former Nissan Motor Co. Chairman Carlos Ghosn — who has already been indicted for understating his remuneration in securities reports — on suspicion of aggravated breach of trust (see below) under the Companies Law, involving about ¥1.6 billion of Nissan’s money.
The special investigation squad of the Tokyo District Public Prosecutors Office on Dec. 21 rearrested former Nissan Motor Co. Chairman Carlos Ghosn — who has already been indicted for understating his remuneration in securities reports — on suspicion of aggravated breach of trust (see below) under the Companies Law, involving about ¥1.6 billion of Nissan’s money.
According to the squad and other sources close to the case, when Ghosn was Nissan’s representative director and chief executive officer, he managed part of his personal assets in a swap transaction that he had his own asset management company sign with a bank. When he had valuation loss of about ¥1.85 billion in October 2008, he transferred the party in charge of the contract from his asset company to Nissan along with the loss, causing damage to the auto company.
When he switched the contract back to his asset company, Ghosn allegedly had a total of $14.7 million (about ¥1.6 billion at the current exchange rate) sent from a bank account of a consolidated subsidiary of Nissan from June 2009 to March 2012 to an acquaintance in Saudi Arabia who helped guarantee credit for the contract, causing damage to Nissan.
According to the sources, Ghosn incurred investment losses from a sharp hike in the yen caused in the wake of the collapse of Lehman Brothers in the fall of 2008. At that time, the bank pointed out a lack of collateral to Ghosn.
Instead of adding collateral, he suggested transferring all the rights, including the losses, from his asset management company to Nissan. The sources said that the bank side initially requested Ghosn gain approval from Nissan’s board but eventually took up his request without gaining consensus of the board.
At the time, the Securities and Exchange Surveillance Commission was aware of the background through inspecting the bank and pointed out compliance problems regarding Ghosn’s action and the bank’s response. After the event, the deal contract was switched back to Ghosn’s asset company from Nissan.
The statute of limitations for aggravated breach of trust is seven years, but it is suspended during the time that a suspect stays overseas. In Ghosn’s case, the investigation squad, therefore, deemed that the statute of limitations has not expired.
The period of Ghosn’s detention, which lasted 10 days after an earlier rearrest on Dec. 10, expired Dec. 20. He, therefore, could have been released on bail after the Tokyo District Court on Dec. 20 rejected the squad’s request to extend his detention. The latest rearrest, however, will further prolong his detention.
The defense counsel representing Nissan Motor Co.’s former Representative Director Greg Kelly, 62, asked the Tokyo District Court on Dec. 21 to release Kelly on bail, in relation to falsifying Nissan’s securities reports over the remuneration of former Chairman Carlos Ghosn, 64, as a director. If accepted, he will be released on bail from the Tokyo Detention House where he has been detained for about a month.
Aggravated breach of trust is a criminal charge against deeds specified in the Companies Law, in which corporate board members and the like violate their duties with the aim of benefiting themselves or third parties, thereby causing financial loss to their companies.
Its statutory penalty is either up to 10 years imprisonment with labor, a fine of up to ¥10 million, or both the imprisonment with labor and the fine. The punishment is heavier than that for breach of trust under the Penal Code, in which even people such as non-board member employees can also be charged and face up to five years of imprisonment with labor or a fine of up to ¥500,000.
By News Desk