April 2, 2019 / 4:22 AM / 2 months ago

Ghosn's lawyers say his trial must be separate from Nissan's to ensure fairness

TOKYO (Reuters) - Lawyers for Carlos Ghosn asked a Tokyo court on Tuesday to try the ex-Nissan Motor Co boss separately from his former employer, arguing he would otherwise not get a fair hearing to fight charges of financial wrongdoing.

FILE PHOTO: Former Nissan Motor Chairman Carlos Ghosn sits inside a car as he leaves his lawyer's office after being released on bail from Tokyo Detention House, in Tokyo, Japan, March 6, 2019. REUTERS/Issei Kato/File Photo

The request marks the first major legal maneuver by Ghosn’s new legal team since his release on bail last month, as he faces mounting accusations of financial misconduct during his time at the helm of Nissan and partners Renault SA and Mitsubishi Motors, one of the world’s biggest automaking groups.

The case has shaken the global auto industry and marked a dramatic fall from grace for an executive once lauded for his rescue of Nissan from the brink of bankruptcy two decades ago.

Tokyo prosecutors have indicted Ghosn and Greg Kelly, a close associate who served as a director on Nissan’s board, on financial-misconduct charges. Nissan is also included in the indictment for making false disclosures in annual securities reports, for which the company has expressed regret.

“No matter how you look at it, having Ghosn sit alongside Nissan at the trial would be peculiar, it would go against his right to a fair trial,” his main defense lawyer, Junichiro Hironaka, told a briefing.

Ghosn was arrested in Tokyo in November after Nissan told prosecutors its own investigation uncovered evidence of his wrongdoing. He spent more than 100 days in a detention center before being released on $9 million bail last month. Ghosn, now ousted as chairman of Nissan, denies the charges, as does Kelly.

Ghosn faces criminal charges in Japan over failing to report around $82 million in salary from Nissan, and for temporarily transferring personal financial losses onto Nissan’s books during the global financial crisis.

“It’s right that his lawyers wouldn’t want Ghosn to stand trial with Nissan. Nissan will plead guilty and that would clearly influence the mood of the trial,” said Nobuo Gohara, a lawyer who heads Gohara Compliance and Law Office, which is not involved in the Ghosn case.

OMAN CONNECTION

Hironaka, a high-profile defense lawyer dubbed “the razor” for his courtroom prowess, told the briefing that his team wanted Ghosn’s case separated from that of Kelly’s because the American is a potential key witness for the Ghosn defense.

Tokyo prosecutors were not immediately available to comment on Ghosn’s lawyers’ requests. A Nissan spokesman said the company could not comment on judicial procedures.

Hironaka also said he did not rule out the possibility of further charges against Ghosn in Tokyo.

Reuters reported on Monday that Renault had alerted French prosecutors to payments made to a Renault-Nissan business partner in Oman, citing three sources.

Renault has established it paid out millions of euros described as dealer incentives to Omani distributor Suhail Bahwan Automobiles (SBA) over five years from around 2011, said the sources, who were briefed on the findings.

Hironaka told the briefing he was aware of the report but had not spoken to Ghosn about it. Ghosn’s French lawyers have denied the allegations of potential embezzlement in Oman.

Nissan had previously found that its own regional subsidiary made questionable payments of more than $30 million to SBA.

Responding last month to earlier reports about the Nissan payments via SBA, a Ghosn family spokesman said: “The dealer incentive payments were directed by regional heads, not the CEO, and rewarded top performing dealers around the world.”

Nissan is holding an extraordinary shareholders meeting next week to vote to remove Ghosn and Kelly as directors, and Hironaka said there was no plan to appeal if shareholders vote to depose the former executives.

Greg Kelly, the former deputy of ousted Nissan chairman Carlos Ghosn, is seen in the car, as he leaves after being released from a detention centre in Tokyo, Japan, December 25, 2018. REUTERS/Kim Kyung-Hoon

An external committee reviewing governance at Nissan said last week there were enough facts to suspect violations of laws and the private use of company funds by Ghosn.

It described a corporate culture at Nissan “in which no one can make any objections to Mr. Ghosn”, who was “in a way deified within Nissan as a savior who had redeemed Nissan from collapse”.

Reporting by Naomi Tajitsu and Tim Kelly; Writing by David Dolan; Editing by Christopher Cushing and Muralikumar Anantharaman

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