Japan prosecutors file new allegation against Nissan's Ghosn

Updated: 2018-12-21 11:02

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Carlos Ghosn, chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, attends the Tomorrow In Motion event on the eve of press day at the Paris Auto Show, in Paris, France, Oct 1, 2018. [Photo/Agencies]

TOKYO - Japanese prosecutors added a new allegation of breach of trust against Nissan's former chairman Carlos Ghosn on Friday, dashing his hopes for posting bail.

Ghosn, along with another executive Greg Kelly, was arrested Nov 19 and charged with underreporting his income by nearly 10 billion yen ($80 million).

The fresh allegations were filed a day after a court rejected prosecutors' request for a longer detention of Ghosn and Kelly. Their lawyers were hoping they could get them released on bail as early as Friday.

So far, the new allegation only applies to Ghosn and Kelly could still be bailed out.

Kyodo News service and other Japanese media reported that prosecutors alleged that Ghosn caused Nissan a loss of 1.8 billion yen ($16 million) in 2008. Prosecutors alleged that Ghosn put his personal investment loss during the Lehman crisis on to Nissan, according to Japanese reports.

Ghosn and Kelly are also facing allegations that they underreported Ghosn's pay by about 5 billion yen ($44 million) in 2011-2015, and another 4 billion yen ($36 million) for 2016-2018, for which their first 10-day detention was to expire Thursday.

The maximum penalty for violating the financial law is up to 10 years in prison, a 10 million yen ($89,000) fine, or both. The conviction rate in Japan is more than 99 percent for any crime.

The arrest of an industry icon has triggered international attention. Prosecutors have been criticized for separating the same allegation into two periods as a tactic to detain Ghosn and Kelly longer. They say Ghosn and Kelly are flight risks. No trial date has been set.

The scandal also raised concerns over the Japanese automaker and the future of its alliance with Renault SA of France.

Kelly's wife, Donna Kelly, said in a video message carried by TV Asahi and other networks that her husband was "wrongly accused as part of a power grab" at Nissan. "Greg and Mr. Ghosn fully believe that they did not break the law," she said.

Renault in 1999 sent Ghosn to turn around Nissan, then on the verge of bankruptcy, and he led its rise to the world's second-largest automaker.

Nissan has dismissed Ghosn as chairman and Kelly as a representative director since the allegations were made. Nissan has put off a decision on Ghosn's replacement.