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Ghosn looked to sway public opinion in court appearance to no avail: prosecutors

TOKYO -- A de facto first hearing over the scandal surrounding ex-Nissan Motor Co. Chairman Carlos Ghosn was held at the Tokyo District Court Jan. 8, presenting the former executive with his first opportunity since his arrest to speak publicly.

The French Ambassador to Japan and other dignitaries of countries where Ghosn has nationality were in the gallery when the former Nissan chairman declared his innocence of all allegations slapped by Tokyo prosecutors. He has been charged with violating the Companies Act for alleged aggravated breach of trust, and breaking the Financial Instruments and Exchange Act for allegedly underreporting his remunerations.

At a subsequent news conference, Ghosn's attorney Motonari Otsuru explained why he had requested the hearing for an explanation for Ghosn's continued detention on the breach of trust charges. "I want prosecutors to do a careful investigation," he said. "And I wanted the court to take a good look at the evidence."

Included within the aggravated breach of trust charges filed against Ghosn is the alleged shifting to Nissan of massive personal financial losses from derivative contracts, causing damage to the automaker.

During the hearing at the district court, however, Otsuru explained that because Ghosn's personal life was based overseas and he built his assets in U.S. dollars, he entered into swap contracts that would convert his yen remuneration into U.S. dollars -- denying that the purpose of his foreign exchange contracts was to invest. Otsuru added that the alleged transfer of the losses "was approved at a Nissan board meeting, and its minutes say the arrangement was made 'at no cost to the company.'" In reality, this no-cost agreement "was complied with," he argued.

Ghosn has also been charged with remitting Nissan funds to his acquaintance, Saudi businessman Khaled Al-Juffali, for personal reasons. Ghosn attorney Otsuru denied the accusation at the hearing, stating that he had been "told by an acquaintance of Al Juffali's that Al-Juffali says that the money was 'appropriate compensation for business dealings.'"

In response to the defense's claims, one senior prosecutor said, "The transfer of the losses made by the former chairman was hidden in the motion approved by the Nissan board meeting. Aggravated breach of trust is established at the point personal losses are illicitly transferred to the company."

As for the "Al-Juffali testimony," the same prosecutor remarked, "Al-Juffali is an accomplice figure. Plus, Ghosn's attorney didn't directly speak to him, but heard from someone who says they did. That hearsay has no value as evidence."

The court hearing, in which those being detained and others can request to have the reason for their detention explained to them, is not commonly used.

In 2017, a total of 583 requests for such hearings were made to courts across the country. The past several years, over 100,000 detention warrants have been issued per year, meaning the number of requests does not even reach 1 percent of all detentions. The most common cases in which the requests are made are in public security cases, in which suspects want their so-called "comrades" to witness them fight out their legal battles. Few detainees are believed to be released as a result of such hearings.

Ghosn's camp "may have wanted to use the procedure to sway public opinion, but it's not a forum for determining whether a crime actually occurred, so it won't have an impact on the investigation," another senior prosecutor stressed.

If nothing new comes up, the former Nissan executive's detention period will end Jan. 11. The Tokyo District Public Prosecutor's Office is expected to indict Ghosn on his second alleged violation of the Financial Instruments and Exchange Act and his alleged violation of the Companies Act. His legal team, however, is likely to request that Ghosn be released on bail, putting the court on the spot.

Meanwhile, at Nissan Motor Co. headquarters, the reaction to Ghosn's appearance in court was muted. A Nissan official stated, "It was all within our expectations. Our position that illicit activity took place has not changed."

On the night of Jan. 8, Nissan CEO Hiroto Saikawa told reporters, "I have no business commenting (on Ghosn's remarks in court). I'm going to focus on company business."

(Japanese original by Kenji Tatsumi, Masanori Makita and Naotaka Ito, City News Department; and Naoya Matsumoto and Ryo Yanagisawa, Business News Department)

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