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Nissan's Ghosn crisis

Ghosn faces months in jail after Tokyo court rejects latest bail bid

French finance minister calls on Renault for new leadership

Former Nissan Motor Chairman Carlos Ghosn has been in custody since November.

TOKYO -- Former Nissan Motor Chairman Carlos Ghosn looks set to spend several more months behind bars after a Tokyo court on Thursday finalized its decision to reject a request for bail, while a senior French minister has urged Renault to begin the process of replacing him as its top executive.

The Tokyo District Court rejected an appeal of its decision, which followed Ghosn's indictment last Friday on the charge of aggravated breach of trust for allegedly misusing Nissan money to cover personal losses.

Ghosn has been in custody since Nov. 19. His current detention period in principle expires on March 10, but it can be renewed every month.

The executive potentially faces "at least another six months" behind bars before being tried, his lawyer, Motonari Otsuru, the former head of special investigations at the Tokyo prosecutors office, said last week.

Japanese courts generally refuse bail to suspects who deny the charges against them. Former prosecutor Yoji Ochiai said the court probably saw a risk that Ghosn would tamper with evidence if granted bail. Although he and his lawyers may request bail at any time, the court is unlikely to change its judgment unless the situation changes.

On Wednesday, French Economy and Finance Minister Bruno Le Maire pressed Renault to choose a successor in the next few days, having argued that if the CEO was unable to fulfill his duties for an extended period, he needs to be replaced.

"The state as a reference shareholder wants a board meeting to be convened in the coming days... and this board should designate a new, sustainable governance for Renault," he said on French TV.

Ghosn's legal team's focus now moves from seeking his release to preparing his defense.

"Ghosn needs to clarify his arguments, as the prosecutors would have already obtained solid evidence from Nissan's executives from plea-bargaining deals," said Ochiai.

Yasuyuki Takai, another ex-prosecutor said, "Ghosn will solidify his arguments with his legal team, potentially requesting the disclosure of evidence from the Tokyo District Public Prosecutors Office. He needs to thoroughly analyze the evidence that prosecutors have in order to fight back."

Takai said the next possible opportunities for a bail request would be after the end of investigation and before the first trial, when arguments and evidence from both sides will become apparent.

Prosecutors argue that Ghosn breached trust by transferring about 1.85 billion yen ($17 million) in personal losses from foreign exchange contracts to Nissan. The allegation also covers a payment of 1.6 billion yen in company funds to a Saudi acquaintance from 2009 to 2012.

The auto executive has also been charged with underreporting his salary for two periods -- the three years from fiscal 2015 to 2017, and the five years from fiscal 2010 to 2014. All of this adds up to around 9.1 billion yen in understated compensation over eight years.

Ghosn told the court last week that he had been "wrongly accused and unfairly detained based on meritless and unsubstantiated accusations."

He has said the foreign exchange swap contracts were meant to soften the currency impact of his salary, which Nissan had insisted should be paid in yen. He said the payments to the Saudi businessman were for work done on behalf of Nissan in Saudi Arabia.

As Ghosn's detention drags on, Japan's judicial system has become a target of criticism from overseas.

His wife Carole this weekend wrote to U.S.-based Human Rights Watch to call attention to the alleged harsh treatment of her husband in jail. His 24-year-old son, Anthony, has called the Japanese judicial system a "nightmare."

Akane Okutsu contributed to this report.

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