An all-out confrontation has emerged between Carlos Ghosn, former chairman of Nissan Motor Co. under detention on charges of aggravated breach of trust and underreported remuneration, and Tokyo prosecutors.
An open hearing was held at the Tokyo District Court on Jan. 8 to explain to Ghosn why he was being detained on an aggravated breach of trust allegation in violation of the Companies Act. The judge cited the risk of Ghosn fleeing and concealing evidence as the reasons, but Ghosn insisted on his innocence, saying that he has been "wrongly accused and unfairly detained."
In his statement to the court, Ghosn denied not only the aggravated breach of trust accusation but also the underreporting charges in violation of the Financial Instruments and Exchange Act, for which he was arrested for the first time in November 2018.
Later in the day, the former chairman's lawyer explained Ghosn's argument in detail at a press conference at the Foreign Correspondents' Club of Japan. The defense team is obviously well aware of the strong international interest in the case.
The prosecution now not only bears the heavy burden of proving its accusations against Ghosn, it faces an international public that is critical of his long detention.
Regarding the aggravated breach of trust charge that alleges that the former chairman transferred 1.8 billion yen in his personal investment losses to Nissan, Ghosn insists that the measure was approved by the automaker's board of directors. The focal point is how much the board knew of the true nature of the arrangement.
As for the transfer of 1.6 billion yen to a Saudi Arabian businessman who provided Ghosn with debt guarantees in connection with the former chairman's investment losses, Ghosn has argued that the Saudi entrepreneur was "appropriately compensated" in exchange for "critical services that substantially benefited Nissan" over its sales and other operations in the Gulf region. But it is odd that the Saudi businessman was paid almost the same amount of money as the loss that had been incurred by Ghosn, and that Nissan Middle East did not know about the transaction. Prosecutors believe that this money was misappropriated by Ghosn as thank-you money, but how are they going to prove that it was not for business? Prosecutors have a high hurdle to clear.
Fifty days have passed since the first arrest of Ghosn. During this time, international media have criticized Japanese criminal prosecution procedures, including the long-term detention of suspects. Prosecutors need to re-examine institutional problems one more time.
The method of prolonging detention periods when suspects deny the charges brought against them, and not even releasing them on bail after indictment in order to psychologically drive them into a corner, is one that has been repeatedly used by the Japanese authorities. This has been considered the norm in the justice system, but Ghosn's case can be a chance for us to rethink criminal prosecution proceedings in this country.
When Tokyo prosecutors sought the extension of Ghosn's detention based on a second warrant on the alleged underreporting of executive remunerations, the Tokyo District Court turned down the request, and even struck down their appeal. The court even disclosed the reason for the refusal in apparent consideration for international attention, saying that the second case is linked with the first underreporting case and should be treated as one.
The practice in Japan of not allowing lawyers to be present when their clients are being interrogated has also come under scrutiny. The United States and major European countries allow the attendance of lawyers during questioning as a means to keep a check on improper interrogation methods. Japan should start discussing necessary legal revisions for the introduction of such an arrangement. How to incorporate the international standard into the Japanese criminal prosecution system is a challenge for both prosecutors and judges.