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Nissan's Ghosn crisis

Tokyo court approves detention of ex-Nissan boss Ghosn until Jan. 11

Latest allegation involves transfer of personal investment losses to carmaker

Ghosn, initially detained in November on charges of underreporting remuneration, was served a fresh arrest warrant on Dec. 21 for allegedly transferring personal investment losses to the Japanese automaker. (Photo by Maho Obata)

TOKYO (Kyodo) -- A Tokyo court approved Monday prosecutors' request to extend the detention of former Nissan Motor Co. Chairman Carlos Ghosn until Jan. 11 due to the latest allegation of financial misconduct.

Ghosn, initially charged over underreporting his remuneration, has been detained since November and was served a fresh arrest warrant on Dec. 21 for allegedly transferring personal investment losses worth 1.85 billion yen ($17 million) to the Japanese automaker in 2008.

Ghosn has denied the allegations. The previous deadline for his current detention period had been set on Jan. 1.

The confinement of Ghosn, who was credited with saving the Japanese automaker when it was teetering on the brink of bankruptcy in the late 1990s, has sparked criticism from overseas over the possibility his detention could be legally prolonged indefinitely, and over the absence of lawyers during interrogations, a norm in Japan.

Caroline Ghosn, 31, the eldest of his four children, said in an interview with The New York Times his family has been told that his cell is unheated and he has repeatedly asked for blankets.

He has been denied pen and paper and has lost weight, his San Francisco-based daughter was quoted as saying.

Ghosn and Greg Kelly, Ghosn's close aide and a former Nissan representative director, were initially arrested Nov. 19 on suspicion of understating in Nissan's securities reports roughly 5 billion yen of the former chairman's 10 billion yen remuneration during the five years through March 2015.

The men and Nissan as a company were indicted Dec. 10 on a charge of violating Japan's financial instruments law.

While Kelly was released on bail on Tuesday, Ghosn's detention period has been further extended after he was served another arrest warrant on suspicion of aggravated breach of trust against Nissan on Dec. 21.

The latest allegation of Ghosn violating company law involves a transfer to Nissan of a derivatives contract between Ghosn's personal asset management firm and the Tokyo-based Shinsei Bank in October 2008.

The transfer allegedly took place after the contract incurred a 1.85 billion yen appraised loss resulting from the 2008 global financial crisis and the bank sought additional collateral, sources knowledgeable about the matter said.

The contract was transferred back to Ghosn's asset management firm with a Saudi acquaintance guaranteeing credit, they said.

In return, Ghosn is suspected of using Nissan's subsidiary in the Middle East to pay the acquaintance a total of $14.7 million from 2009 to 2012, according to the sources.

Ghosn admitted to shifting the contract to Nissan but denied causing any real loss to the company, saying he temporarily needed the company's creditworthiness and had no intention of using the automaker's funds to erase the loss, the sources said.

He also admitted to payments made to the acquaintance's company, but argued that it was because some Nissan-related businesses had been outsourced, they said.

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