He was led into the courtroom by two guards who uncuffed him and sat next to him on a bench in front of his three lawyers. The streets outside the courthouse in central Tokyo were mobbed by reporters before the hour-and-a-half hearing as helicopters hovered overhead.
Inside the courtroom, Ghosn was expected to tick off a four-point defense, according to a transcript of his prepared remarks seen by Automotive News.
Tada read statements describing complicated charges that outlined Ghosn’s alleged act to transfer personal investment losses to Nissan.
The hearing was called by Ghosn’s lawyers through a rarely used Japanese legal provision that allows suspects to petition the court to hear a justification of their detention. While it is unlikely to change the course of the case, it provides Ghosn a first chance to defend himself in public, influence the local media and stoke public opinion in his favor.
Nissan as pillar
In his prepared statement, Ghosn emphasized his devotion to Nissan and his achievements in transforming it from a near-bankrupt national embarrassment when he arrived in 1999 into a “pillar of the Japanese economy” today. He cited figures to back up the radical revival.
“We transformed Nissan, moving it from a position of a debt of 2 trillion yen ($18.5 billion) in 1999 to cash of 1.8 trillion yen ($16.6 billion) at the end of 2006, from 2.5 million cars sold in 1999 at a significant loss to 5.8 million cars sold profitably in 2016,” Ghosn said.
“These accomplishments — secured alongside the peerless team of Nissan employees worldwide — are the greatest joy of my life, next to my family,” he said.
Ghosn was arrested Nov. 19 and has been unable to answer the mounting accusations from detention. His lawyers have been largely mum in public. Japanese media and people familiar with Ghosn’s defense, however, say he denies wrongdoing and will fight to restore his reputation.
Following the hearing, Ghosn’s Japanese lawyers — Motonari Otsuru, Go Kondo and Masato Oshikubo, will go on the offensive with a news conference at the Foreign Correspondents’ Club of Japan. They are expected to outline his defense and answer questions publicly for the first time.
After his arrest, Ghosn was indicted on Dec. 10 on allegations he underreported some $43.5 million in deferred compensation that should have been reported in securities filings.
Since Ghosn’s indictment, he was arrested again on separate allegations of temporarily shifting ¥1.85 billion ($17.1 million) in personal swap contract losses to Nissan and having Nissan pay $14.7 million to a business associate who allegedly helped Ghosn handle the red ink.
He has yet to be indicted on those allegations.
Ghosn’s defense In his prepared remarks, Ghosn counters the first indictment saying that the amount of deferred, post-retirement compensation had not been fixed and that he had never received any remuneration that had not been disclosed. He said he had no intent to violate the law.
“For me, the test is the ‘death test’: If I died today, could my heirs require Nissan to pay anything other than my retirement allowance? The answer is an unequivocal ‘No,’” he says.
Ghosn makes a twin-pronged defense against the grounds of the arrest for allegedly transferring personal losses. He admits to leveraging Nissan as collateral against his swap losses but says that the loss-making swap contracts were transferred back to him at no cost to Nissan.
He also says that the payments made to his business associate — Saudi businessman Khaled Al Juffali — were for legitimate business purposes, not some kind of payback for personal help.
Ghosn says the Khaled Juffali Co. helped Nissan solicit financing and restructure struggling distributors in the Middle East region. He also helped Nissan negotiate the development of a manufacturing plant in Saudi Arabia by organizing high-level meetings with Saudi officials.
Nissan suspects that the payments to Juffali were actually payback for Juffali’s assistance in arranging a new line credit line that helped Ghosn handle his swap losses.
Nissan alleges that Ghosn then used what’s known as a CEO reserve fund, normally used for unbudgeted, one-time expenditures, to pay a company owned by Juffali in four installments totaling $14.7 million over the four fiscal years from 2009 to 2012.
A statement issued separately on behalf of the Khaled Juffali Co. said the payments were for supporting and promoting Nissan’s business strategy in Saudi Arabia. Among the assistance was help in enabling Nissan to secure a “significant” ownership position in the Nissan Saudi Arabia joint venture established with the Kingdom of Saudi Arabia.
“Clearly, Khaled Juffali Company has provided manifold, tangible services that continue to inure to the substantial benefit of Nissan Motor Co., Ltd. and Nissan Middle East,” the statement said.
Love for Nissan
Finally, Ghosn pleaded his contributions to Nissan.
“I have a genuine love and appreciation for Nissan,” Ghosn says in his prepared remarks. “I have acted honorably, legally, and with the knowledge and approval of the appropriate executives inside the company — with the sole purpose of supporting and strengthening Nissan, and helping to restore its place as one of Japan’s finest and most respected companies.”
A Tokyo court has approved Ghosn’s detention through Jan. 11, as prosecutors collect evidence and build their case against him, relying on a Japanese practice of interrogating suspects for hours every day in the absence of their lawyers.
Source: Automotive News
