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Nissan's Ghosn crisis

Ghosn trial to start in September under accelerated process

Battle over scope of case to begin with pretrial arrangements in May

Junichiro Hironaka, ex-Nissan Chairman Carlos Ghosn's chief lawyer, speaks to reporters in Tokyo. His team will argue that the company knew about allegedly hidden payments.   © Reuters

TOKYO -- The trial of former Nissan Motor Chairman Carlos Ghosn is expected to begin as early as September, with pretrial proceedings kicking off in May, launching a tug of war over what ground the case will cover.

The Tokyo District Court set May 23 as the start of the pretrial arrangements in a Wednesday meeting attended by court representatives, prosecutors and defense lawyers, according to a source familiar with the matter. It proposed that Ghosn's trial on charges of underreporting his compensation begin in September, proceeding at a pace of six hearings per month.

The court appears to be taking into account the defense's request to speed along a process that is often lengthy in Japan. The court, prosecutors and defense will use the arguments outlined by each side to plan out the proceedings and narrow down the central issues and evidence to be presented. Ghosn has reportedly said he wants to attend the pretrial sessions.

Attention now turns to prosecutors' presentation of evidence. The prosecution has already submitted to the court a list of facts to be proven, which states that Ghosn received a total of 31.4 billion yen ($282 million) in remuneration from Nissan since 1999.

Prosecutors allege that Ghosn hid compensation to avoid criticism over high pay after Japan in 2010 began requiring executives to disclose their remuneration. They say he directed subordinates to designate part of his compensation as consulting or advisory fees to be received after retirement. He was legally required to disclose these deferred payments in securities filings, they argue.

The defense has requested additional evidence from prosecutors. It will analyze the available evidence to establish a line of argument and pick witnesses for cross-examination. As a rule, further requests for evidence cannot be made after pretrial arrangements.

Lawyers for Ghosn probably will counter the prosecution's charge by maintaining that the post-retirement payments were formally discussed within the company, citing related documents containing Nissan CEO Hiroto Saikawa's signature. Saikawa may be questioned during the trial.

Pretrial proceedings in large corporate cases are often lengthy for this reason, as the prosecution and defense square off over large amounts of evidence and complex allegations. The trial of Livedoor founder Takafumi Horie began six months after he was indicted on fraud charges, while a bid-rigging case involving contractors for the Linear Chuo Shinkansen rail line was tried about 11 months after indictment.

The average length of pretrial arrangements in 2017 was about 8.1 months, according to the Japanese Supreme Court. Should the proceedings become contentious, the trial could be pushed back beyond September.

Charges against former Nissan director Greg Kelly and the automaker itself, which both face allegations related to Ghosn's misstated compensation, probably will be tried separately. No date has been set for pretrial hearings in either case.

Ghosn was arrested on Nov. 19. In addition to failing to report about 9.1 billion yen in deferred compensation, he is accused of temporarily transferring about 1.85 billion yen in personal losses to Nissan and paying $14.7 million through a subsidiary of the automaker to a Saudi acquaintance who helped deal with the losses.

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