Were there any illegal acts that caused damage to Nissan Motor Co.? With the claims of the prosecutors and the defendant standing squarely against each other, the determination of what really happened will be moved to a trial.
The special investigation squad of the Tokyo District Public Prosecutors Office has indicted former Nissan Chairman Carlos Ghosn again on a new charge of aggravated breach of trust in violation of the Companies Law, plus one other charge.
Ghosn transferred a valuation loss of about 1.85 billion yen, which was incurred through a personal investment, to Nissan. About 1.6 billion yen was provided from a Nissan subsidiary to Ghosn's Saudi acquaintance, who had helped secure a credit guarantee for the investment. Ghosn has been charged with causing damage to Nissan by these two acts.
Regarding the transfer, Ghosn has claimed he is innocent, saying he did not cause any damage to Nissan. The special investigation squad has taken a position that the crime was constituted when the loss was transferred. At the trial, a key point of contention is likely to be whether the requirements for constituting aggravated breach of trust can be met.
Both sides stand in direct opposition also over the transfer of funds to the acquaintance side. Ghosn has stressed that the money was an appropriate reward for what the acquaintance side did. A former executive of the subsidiary said, "There was no reason to provide a large amount of money."
It appears odd that a large amount of money was sent in an ambiguous manner after the credit guarantee was made by the acquaintance. Was this really a legitimate expenditure? How far the special investigation squad can prove the allegations will become the focus.
Discern need for detention
Attention will be also directed to the custody of Ghosn after his indictment.
Ghosn also has been indicted on a charge of violating the Financial Instruments and Exchange Law by allegedly understating his remuneration in securities reports. His detention at a detention house has spanned the New Year, exceeding 50 days since his first arrest in November last year.
Many cases handled by the special investigation squad have seen detentions continue until trials start when defendants denied allegations.
It is also true that such a lengthy detention has been criticized as a system of "hostage justice." Over Ghosn's detention, harsh words from foreign media and others have been conspicuous.
In the case of false reporting, there were special circumstances in which the special investigation squad and Nissan-related figures agreed to make plea-bargaining deals and many pieces of evidence were obtained. This may be one of the reasons why the court did not allow the extension of Ghosn's detention when he and another executive were rearrested over similar allegations.
In the case of aggravated breach of trust, the situation is slightly different. One aspect is that the possibility that Ghosn would try to destroy evidence, such as by coordinating statements with others concerned, cannot be ruled out. The court needs to calmly judge the need for Ghosn to be detained after the indictment.
For Nissan, the difficult situation is expected to continue. In the false reporting case, Nissan also has been indicted as a corporate body under a dual liability provision of the law. It is an urgent task for the company to rebuild its governance.
(From The Yomiuri Shimbun, Jan. 12, 2019)
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