Asia Business Channel

Japanese prosecutors say that Carlos Ghosn will be detained “indefinitely”

Japanese prosecutors said that they would continue to detain former Nissan chairman Carlos Ghosn for as long as they need to in order to finish their investigation into Ghosn’s financial irregularities.

Shin Kukimoto, Deputy Chief Prosecutor for the Tokyo District Public Prosecutors' Office defended the handling of Ghosn, who was arrested on November 19 along with another Nissan executive, Greg Kelly. In a statement to Japanese media, Kukimoto said: "We are not detaining (Ghosn) for an unnecessarily long time. We only take necessary steps as needed."

Kukimoto refused to confirm reports that both Ghosn and Kelly have denied the allegations against them. Ghosn is suspected of violating financial laws by underreporting millions of dollars in income. Kelly is accused of collaboration in issuing financial reports that were distributed to shareholders and regulators and that were false. Nissan said an internal probe triggered by a whistleblower found Ghosn also allegedly misused company assets.

Japanese media outlet, the Yomiuri Shimbun has reported from their sources that prosecutors now believe that Ghosn, with the assistance of Kelly, did not report more than $88 million USD in compensation for nine years – March 2010 to March 2018,

Since Ghosn’s arrest last month, Japanese automakers Nissan Motor Co and Mitsubishi Motors Corp have dismissed Ghosn as their chairman. Renault SA of France has named an interim chairman but has kept Ghosn on as its chairman while seeking more information about his case.

Prosecutors have obtained court approval to keep Ghosn in detention, in line with standard investigative procedures in Japan till December 10th and have said they will then ask for an extension. After an initial investigation period, Japanese authorities can detain a suspect up to 20 days per charge, and gain more time by adding more charges.

Corporate lawyers as well as human-rights activists have pointed out that the Japanese legal system is based upon the presumption that an individual is guilty until they are proven innocent. Since prosecutors have the ability to go back to the court and ask for 20-day detention extensions, people held in the Japanese detention system can be held for months or even years before formal charges are brought against them.

Ghosn’s detention in reminiscent of the detention and subsequent prosecution and jailing of Takafumi Horie, the 34-year-old Internet entrepreneur who rattled corporate Japan with his celebrity lifestyle and brash takeover bids. Horie was arrested for securities fraud and held in detention for more than 6-months while prosecutors built their case against him. At that time, prosecutors bragged that they would hold Horie in an austere detention cell until he broke and admitted to his fraudulent actions.

In response to criticism about Ghosn’s detention, Kukimoto, the prosecutor said to media: "Japan is a law-abiding country and this is the way our justice system works. I don't see any problem with that. Each country has its own history and culture. It is not appropriate to criticize a system in another country just because it's different from your own."

The arrest and detention of such a prominent businessman is shedding light on Japan's pre-indictment detention of suspects, even those suspected of financial crimes, which has long drawn criticism from human rights activists.

An example of the flexibility that prosecutors and courts have is the case of Yoshiaki Tsutsumi, the Japanese railroad and resort magnate who was once ranked as the richest man in the world. Tsutsumi was arrested on suspicion of insider trading and filing false financial statements – essentially the same crime as Ghosn is accused of – and ultimately, The Tokyo District Court gave Tsutsumi a 30-month prison term, that was suspended and fined him $50,000 USD for falsifying financial statements and engaging in insider trading.

Critics of the Japanese legal system say that it is not transparent and there are too many variables, rather than consistent standards that regulate investigations, detentions, questioning, presence of legal counsel, prosecution and jailing. They hope that the Ghosn case will shine an international light on the Japanese legal system and that some reforms will be made to the system.

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