The latest allegation may involve a company being made to cover personal losses incurred through private transactions. If true, this would be an act of managing the company for personal benefit.
The special investigation squad of the Tokyo District Public Prosecutors Office has rearrested former Nissan Motor Co. Chairman Carlos Ghosn on suspicion of violating the Companies Law by committing an aggravated breach of trust. This is the third time that he has been arrested.
Ghosn's previous arrests concern cases in which he allegedly violated the Financial Instruments and Exchange Law by underreporting his remuneration in securities reports. These arrests were criticized by some as steps taken against violations of procedural law, but the latest arrest concerns a case in which he allegedly violated substantive law by inflicting asset losses on Nissan. It is safe to say that the probe has reached a new phase.
Ghosn suffered appraisal losses worth about 1.85 billion yen through swap transactions conducted while managing his personal assets. In October 2008, subsequent to these losses, he allegedly replaced his own asset management company with Nissan as the party that had signed a contract with a bank, thereby shifting the losses to the automaker.
After the Securities and Exchange Surveillance Commission had pointed a finger at his conduct as problematic, Ghosn is then alleged to have made the asset management firm a party to the contract again. He is also suspected of having a total of about 1.6 billion yen transferred from a bank account held under the name of a Nissan subsidiary to a party of an overseas acquaintance who had cooperated in Ghosn's bid to obtain a credit guarantee.
If he actually did so as alleged, Ghosn's deed constitutes a grave breach of faith against Nissan. To what extent did the automaker's board of directors grasp the sequence of developments? There is also the possibility that the bank will face questions about the appropriateness of its response to Ghosn's request.
Uncover whole truth
Despite acknowledging his action of having shifted the losses to Nissan, Ghosn is said to have told investigators that the automaker has suffered no actual damage.
The statutory penalty imposed on such figures as corporate executives for an aggravated breach of trust is even more grave than that assigned to an ordinary breach of trust. This is because the former offense will more greatly affect shareholders and people tied to corporations. Given the seriousness of the matter, thorough investigations are required.
Ghosn was first arrested on Nov. 19 for allegedly falsifying securities reports. On Dec. 10, he was arrested again over similar allegations. The time he has spent at a detention house has exceeded one month.
Ghosn's third arrest came when there was growing criticism by foreign media of his two arrests over similar allegations and his long period of detention.
During interrogations following Ghosn's second arrest, a request from the special investigation team to extend his detention was rejected by the Tokyo District Court. It is unusual that such a request in a case handled by the special investigation squad is not approved.
Partly because of the view that Ghosn could soon be released on bail, the special investigation team seems to have moved forward with this third arrest.
There is no doubt that Ghosn's third arrest will further prolong his detention. Some say the latest rearrest may have been a strong measure to prevent him from being released on bail. This observation is inevitable in some respects.
Nissan has asserted that Ghosn is responsible for cases of alleged misconduct.
The special investigation team has every reason to continue its investigations if it believes Ghosn's alleged act of running Nissan for his personal benefit is the true nature of the affair. Investigators should make efforts to uncover the whole truth behind these cases while paying due attention to proper criminal procedures.
(From The Yomiuri Shimbun, Dec. 23, 2018)
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