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Nissan's Ghosn crisis

Ghosn's vast influence likely undercut his case for bail

Risk of evidence tampering weighed in court's decision to uphold detention

Pigeons fly outside the Tokyo Detention Center, where former Nissan Chairman Carlos Ghosn has been held since November.   © AP

TOKYO -- Former Nissan Motor Chairman Carlos Ghosn faces a prolonged stay in jail as he awaits trial after being denied release by a judge who appears to have determined a risk that the influential executive could try to conceal evidence against him.

Ghosn's lawyers expect the case, which has captured international attention, to take about six months to come to trial. They are expected on Wednesday to appeal the Tokyo District Court's decision a day earlier to reject the 64-year-old auto industry executive's bail application.

Japanese courts generally refuse bail to suspects who have denied the allegations against them, as Ghosn has. In 2017, only about 30% of suspects were granted bail before the verdict in their first trial, and those who maintained their innocence tended to spend a longer time in custody after being indicted, statistics show.

Ghosn's treatment contrasts with that of former Nissan Representative Director Greg Kelly, who was granted bail last month despite having denied the allegations against him. Kelly was arrested alongside Ghosn on Nov. 19 on suspicions that he helped the executive understate his pay in violation of Japanese securities law.

The difference stems partly from the fact that Ghosn's indictment on aggravated breach of trust constitutes a more serious charge and involves a more complex web of evidence and related people. Ghosn, as head of the Nissan-Renault alliance, also wields far more influence than Kelly does within and outside Nissan.

The court may be more likely to grant bail once prosecutors finish gathering evidence and building their case, or after Ghosn enters a plea, when he would be seen as less likely to tamper with evidence.

Ghosn's prolonged detention, during which he is repeatedly interrogated without the presence of his lawyer, represents a tactic Japanese lawyers have long criticized as "hostage justice," intended to extract confessions and statements favorable to the prosecution.

His treatment has also aroused international criticism. The executive's wife, Carole Ghosn, this weekend sent a letter to U.S.-based advocacy group Human Rights Watch to call attention to her husband's conditions. Ghosn's 24-year-old son, Anthony, has called the Japanese legal system a "nightmare."

On Tuesday, the head of a powerful Japanese business lobby weighed in, urging that criticism of Ghosn's treatment be "taken straightforwardly."

Setting aside the question of the allegations against Ghosn, "we must be fully aware of the fact that the current Japanese approach of long periods of detention has been rejected from the standpoint of international common sense," said Hiroaki Nakanishi, chairman of the Japan Business Federation, or Keidanren.

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 of his from 2009 to 2012.

The auto executive has also been charged with understating his income 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 underreported 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 contracts were intended to mitigate the currency impact of his salary, which Nissan insisted on paying in yen. He said payments to the Saudi businessman were for work done on behalf of Nissan in Saudi Arabia.

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