NSANY Nissan Motor Company Ltd (PK)

By Sean McLain 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 23, 2019).

TOKYO -- Carlos Ghosn was indicted Monday on charges that he misappropriated funds sent by Nissan Motor Co. to a distributor in the Middle East, clearing the way for him to seek release on bail.

Tokyo prosecutors arrested the former Nissan and Renault SA chairman April 4 -- his fourth arrest since Nov. 19. In the latest set of charges, prosecutors allege that between 2017 and 2018 Mr. Ghosn arranged for a company he controlled to receive a portion of money sent by Nissan to its overseas distributor. Of a total $10 million sent by Nissan during this period, prosecutors allege Mr. Ghosn received $5 million.

Mr. Ghosn's legal team believes this is the final charge their client will face.

Prosecutors haven't named the distributor, but Mr. Ghosn's legal team has identified it as Oman-based Suhail Bahwan Automobiles. Nissan has investigated whether the Omani company helped Mr. Ghosn obtain a yacht and whether it helped fund an investment company partly owned by Mr. Ghosn's son, people familiar with the investigation have said.

Mr. Ghosn's U.S.-based spokesman said that he was innocent of the latest charges and that he expects to be vindicated.

Previously, Mr. Ghosn was charged with misstating deferred compensation on Nissan's annual financial statements submitted to regulators and funneling Nissan money to the business of a Saudi friend who helped him with a personal financial problem.

Mr. Ghosn has said he had only hypothetical discussions about future compensation. He has said Nissan paid the Saudi company for "critical services that substantially benefited Nissan."

A Tokyo court had authorized Mr. Ghosn's detention without possibility of bail through Monday. By indicting him, prosecutors can keep him behind bars for the moment, but Mr. Ghosn can seek release on bail. In the absence of an indictment, Mr. Ghosn would have automatically been released.

His lawyers have said Mr. Ghosn isn't a flight risk, and they have said the terms of his previous release on bail, including a ban on computer use outside his lawyer's office, ensured that he couldn't destroy evidence. Mr. Ghosn had been out on bail of nearly $9 million for about a month before his latest arrest.

Mr. Ghosn's lawyers applied for bail again on Monday, a few hours after he was indicted on the latest charges. The court will hear Mr. Ghosn's request for bail on Tuesday.

After the most recent arrest, Mr. Ghosn was interrogated for 72 hours over a 17-day period, according to a blog post by one of his lawyers, Takashi Takano. As is typical in Japan, the interrogation occurred without the presence of Mr. Ghosn's lawyers. Mr. Takano said the legal team filed a complaint with prosecutors because Mr. Ghosn was forced to sit through interrogation sessions, often two or three times a day, despite making clear that he intended to remain silent.

Critics of Japan's judicial system -- including Mr. Ghosn's legal team -- have said prosecutors use these tactics to force a confession out of suspects. Japanese authorities have said Mr. Ghosn is receiving normal treatment and the goal of the interrogation is to find out the facts, not to compel a confession.

Should Mr. Ghosn fail to receive bail, he will face a potentially long period of solitary confinement. Japan has a 10-day holiday starting Saturday surrounding the May 1 enthronement of a new emperor. Detainees are permitted 30 minutes outdoors on weekdays but generally not when the jail is on weekend or holiday staffing.

During a previous period of confinement during Japan's New Year holidays, Mr. Ghosn was unable to leave his cell for six days, his wife, Carole, said in an interview.

Mr. Ghosn's lawyers have said a long period of confinement risks worsening a kidney condition that requires daily exercise to manage.

--Chieko Tsuneoka contributed to this article.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

April 23, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.