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Nissan's Ghosn crisis

Ghosn requests bail after being hit with fresh charges

Prosecutors add breach of trust to underreported pay indictment

Ousted Nissan Motor Chairman Carlos Ghosn was served a new indictment in Tokyo on Jan. 11, days after he delivered a vigorous denial in court.

TOKYO -- Former Nissan Motor Chairman Carlos Ghosn was served a new indictment in Tokyo on Friday for breach of trust and underreporting his income.

Ghosn's legal team applied for bail later on Friday. The embattled executive has denied all allegations since he was arrested in November, and spoke in his own defense in court on Tuesday.

The application is not set to be processed until Tuesday at the earliest, as Monday is a Japanese public holiday.

The Tokyo District Public Prosecutors Office argues 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 of Ghosn's from 2009 to 2012.

The prosecutors also charged the auto executive for understating his compensation for the three years from fiscal 2015 to 2017. Ghosn had already been charged in December for the same offense over the five years from 2010 to 2014. All of this adds up to around 9.1 billion yen in underreported income over eight years.

They have also prosecuted former Nissan Representative Director Greg Kelly, who is now on bail, and the automaker as the corporation for underreporting Ghosn's compensation.

Ghosn's nearly two-month detention has led to a wave of international criticism of Japan's judicial procedures.

"Our investigation has been conducted properly based on the court's warrant," said Shin Kukimoto, deputy chief prosecutor for the Tokyo District Public Prosecutors Office, on Friday after acknowledging that the investigation would be met with "diverse responses."

At the hearing on Tuesday, Ghosn insisted that all agreed compensation had been fully disclosed and said the foreign exchange contracts were related to the company's insistence that he be paid in yen.

He claimed he entered the contracts, using Nissan shares as collateral, to protect himself against currency fluctuations as his expenses were all in dollars.

Nissan took on the collateral temporarily after the global financial crisis in October 2008, but the shares were returned and the company suffered no financial losses, Ghosn said.

Ghosn also rejected allegations that he paid Saudi businessman Khaled al-Juffali to help him arrange collateral for the forex contracts.

On Friday, Nissan brought criminal complaints regarding the alleged breach of trust to the Tokyo prosecutors office. The automaker is taking further measures to remove Ghosn, who has been ousted as chairman but remains as a director. The company has sent his legal team an eviction notice for his Tokyo apartment.

Renault, Nissan's largest shareholder, announced on Thursday that it had found no evidence of wrongdoing in an internal investigation. Ghosn remains chairman and CEO of the French automaker.

"I am an innocent of the accusations made against me," Ghosn said on Tuesday, insisting that he had been "wrongly accused and unfairly detained based on meritless and unsubstantiated accusations."

Ghosn's request for release at the hearing was rejected the following day, as the court judged there was a risk that he could flee the country or hide evidence.

His lawyer, Motonari Otsuru, the former head of special investigations at the Tokyo prosecutors office, admitted that Ghosn potentially faced "at least another six months" behind bars before being tried. It is unusual to approve bail before the first trial, he said this week, as the case is complicated and requires documents in Japanese and English.

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