A defendant who had been released on bail has been taken back into custody. This can be described as an extraordinary and dramatic arrest.
The special investigation squad of the Tokyo District Public Prosecutors Office has rearrested former Nissan Motor Co. Chairman Carlos Ghosn on suspicion of aggravated breach of trust, a violation of the Companies Law. This is the fourth time Ghosn has been arrested.
On March 6, Ghosn was released on bail after being held for 108 days at the Tokyo Detention House in Tokyo. His defense counsel had indicated Ghosn was willing to voluntarily submit to questioning if requested by the special investigation squad. Ghosn's lawyer criticized his latest arrest, saying, "I don't understand for what purpose he has been detained."
An investigation conducted while Ghosn was at home would face restrictions, such as on the time allowed for questioning, and there was also the risk evidence could be destroyed. The fact prosecutors boldly arrested Ghosn while being prepared to receive criticism is a sign of their strong resolve to uncover the full truth behind murky money flows from Nissan.
Ghosn's latest arrest stemmed from suspicions that he instructed the improper disbursement of Nissan funds to a dealership in Oman in the Middle East, and then diverted a total of about 560 million yen of this money for personal use.
There are reportedly suspicions some of the money was moved to a company run by Ghosn's wife and sent to a U.S. investment-related firm at which Ghosn's son is the chief executive officer.
Rebuild governance structures
Previously, Ghosn had been charged for allegedly underreporting his income in annual securities reports and allegedly improperly disbursing about 1.6 billion yen in Nissan funds to a Saudi Arabian acquaintance related to a personal investment.
If the suspicions behind Ghosn's latest arrest are proven to be true, it would even more clearly demonstrate that he considered Nissan to be for his own use. It seems the special investigation squad also aims to reveal the underhandedness of Ghosn's actions.
Ghosn has insisted he is innocent, such as by claiming the payments were proper. The latest case, which was set in the Middle East, involves repeated and complex movements of funds passing through multiple countries. The special squad should continue its investigation while being mindful of following the appropriate criminal procedures.
In the days ahead, attention will be focused on whether the courts approve requests by prosecutors to detain Ghosn, and possibly to extend his detention. In a series of incidents, there was continued criticism overseas about Ghosn's lengthy detention. The courts must closely examine the necessity of keeping him in custody, as well as whether it will impact the investigation.
Ghosn was also chairman of French automaker Renault SA. Renault has notified French prosecutors about its suspicions of murky payments to the Oman dealership and that funds might have been diverted to pay for a wedding reception held at the Palace of Versailles in France.
Nissan and Renault also cannot dodge their responsibility for allowing murky payments involving huge sums of money to continue over many years. They urgently need to rebuild their governance structures and install systems that will prevent any recurrence of such payments.
(From The Yomiuri Shimbun, April 5, 2019)
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