Ghosn held in austere prison

November 22, 2018 09:54 CET
UPDATED: Nov. 22 13:06 CET – adds detail

Carlos Ghosn is being held at Tokyo’s detention center that is known for an austere regime.

The cell is a far cry from Ghosn’s usual luxury lifestyle and includes restrictions on sleeping during the day and a requirement to wear a mask when meeting with visitors to prevent the spread of disease.

The detention house is “pretty cold at this of time year,” internet entrepreneur and convicted fraudster Takufumi Horie told his followers on Twitter.

Ghosn is taking the arrest and investigation very badly and does not understand what has hit him, Yann Rousseau, the Tokyo correspondent for France’s Les Echos told France Info radio on Thursday. He has been visited by the French ambassador to Japan, as well as the Brazilian consul, who was granted a brief moment with Ghosn through a window, AFP reported.

The executive will be represented by Motonari Otsuru, a former head of the special investigation task force of the Tokyo District Public Prosecutors Office, NHK reported earlier on Thursday, citing unidentified sources.

Prosecutors have also provided some insight into the executive’s daily rhythm: eight hours of sleep while he is in his detention cell, three meals and 30 minutes of prescribed exercise. He is said to be held at the same facility as the death-row inmates from the Japanese cult that perpetrated the 1995 Tokyo subway sarin attack, many of whom were executed just a few months ago.

Falsely reporting income “is one of the most serious categories of offenses,” said Shin Kukimoto, deputy chief prosecutor at the Tokyo District Public Prosecutors Office. “It is a heavier category of crime than insider trading. I am aware that the eyes and the ears of the world are on this case.”

Executive prison time is still a rarity in most parts of the world. In Germany, fellow auto CEO Rupert Stadler, who ran Audi, was jailed in June as part of the probe into diesel-cheating at parent Volkswagen Group. He was freed on bail at the end of October. Another high-profile case in Germany was Thomas Middelhoff, the former CEO of media company Bertelsmann and retailer Arcandor, who served a total of two years for misappropriating 500,000 euros worth of corporate funds. Former Toyota executive Julie Hamp left a Tokyo jail in 2015, 20 days after police arrested her for violating Japan’s drug laws.

The Tokyo District Court on Wednesday approved Ghosn’s detention for a further 10 days. According to Japanese law, Ghosn can be held in custody for up to 23 days without being charged.

Ghosn was arrested on Monday after an internal investigation triggered by a tip-off from an informant revealed that he had allegedly engaged in wrongdoing, including personal use of company money and under-reporting of his earnings, for years. Greg Kelly, the only American on Nissan’s board, was also arrested on Monday and accused, like Ghosn, of financial misconduct.

The Asahi Shimbun newspaper said Ghosn had given Kelly orders by email to make false statements on his remuneration. Tokyo prosecutors likely seized the related emails and may use them as evidence, the paper said.

The Yomiuri, Japan’s biggest-circulation daily, cited unnamed sources as saying that Nissan’s internal investigation found that Ghosn had since 2002 instructed that about $100,000 a year be paid to his elder sister as remuneration for a non-existent advisory role.

Nissan had found through the investigation that Ghosn’s sister had in fact been living in and managing a luxury apartment in Rio de Janeiro that the company had bought through an overseas subsidiary but had done no advisory work for the automaker, the paper said.

Nissan provided Ghosn with six houses, including residences in Tokyo and New York, a company official said, asking not to be identified discussing private information. His other company-funded properties included homes in Beirut, Paris and Amsterdam, reports said.

Prosecutors said Ghosn may have undeclared income of as much as 5 billion yen ($44 million). As more details begin to emerge, the actual number may be higher, an official said Thursday. Nissan was holding a board meeting Thursday to oust Ghosn as chairman.

Renault’s board on Tuesday kept Ghosn in his posts as chairman and CEO but appointed Renault Chief Operating Officer Thierry Bollore as deputy CEO with the same powers as Ghosn.

Reuters and Bloomberg contributed to this report

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