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Ghosn's custody extended as crisis deepens at Nissan
JAPANESE authorities on Wednesday extended Nissan chairman Carlos Ghosn's detention by 10 days, as it emerged the car giant itself could face charges over the alleged financial misconduct that levelled its once-loved leader.
Monday's stunning arrest of the millionaire car tycoon, who is credited with turning around the Nissan-Renault-Mitsubishi Motors alliance, sent shockwaves through the global car sector, corporate Japan and beyond.
On Wednesday, several media reported that the Tokyo district court had ordered the 64-year-old Brazil-born businessman to be held for a further 10 days as prosecutors step up their investigation over the alleged under-reporting of Mr Ghosn's package by about five billion yen (S$60.8 million).
Prosecutors had 48 hours after his arrest to either press formal charges, release him or request this 10-day custody extension to continue the probe.
The titan of the car industry is being held in a detention centre in northern Tokyo in conditions far removed from his flashy lifestyle. "In principle, he will be all alone in a cell," lawyer Ayano Kanezuka told AFP.
"There is everything you need, heating, a bed, but conditions are spartan," said Mr Kanezuka's colleague Lionel Vincent.
The crisis appeared to be going from bad to worse for Nissan, as the Asahi Shimbun reported that prosecutors believe the firm also had a case to answer. Both Nissan and the authorities declined to comment.
Nissan's board will decide on Thursday whether to remove Mr Ghosn as chairman, a staggering reversal of fortune for the once-revered leader who created the three-way alliance which together sells more cars worldwide than any other automaker.
Mr Ghosn's fate appears all but sealed after his hand-picked replacement as CEO, Hiroto Saikawa, launched an astonishing broadside at his mentor, saying "too much authority" had been placed in his hands and lamenting the "dark side of the Mr Ghosn era".
Mr Saikawa pointedly refused to offer the deep "apology bow" that usually accompanies corporate scandals in Japan and played down the role Mr Ghosn had personally played in reviving the firm's fortunes.
However, in France, Renault said it was sticking with the fallen manager as chief executive although it named chief operating officer Thierry Bollore as deputy CEO, handing him the "same powers" as the "temporarily incapacitated" Mr Ghosn.
After an emergency board meeting, Renault urged its sister company Nissan to share "evidence seemingly gathered" against Mr Ghosn from a months-long internal investigation, saying it was unable to comment on the charges without this information.
Paris and Tokyo have been scrambling to contain the fallout from the arrest, with the finance ministers of both countries declaring strong support for "one of the greatest symbols of Franco-Japanese industrial cooperation".
The scandal - the latest in a string to affect Japan Inc - wiped millions off the stock value of all three companies, but Nissan bounced back marginally in opening Tokyo trade, climbing nearly half a percentage point in a falling market.
And Mr Ghosn won some support on the street of Tokyo, with passer-by Yoshiaki Watanabe telling AFP: "I think this is someone who was able to do what we Japanese, stuck in our ways, were not able to do."
Mr Ghosn was once the darling of corporate and even popular Japan - even having a manga comic inspired by him - and has been the glue holding the car tie-up together since 1999.
Renault owns 43 per cent of Nissan while in turn the Japanese firm has a 15 per cent stake in Renault. Nissan has become the alliance's key player, however, posting sales of 12 trillion yen last year compared with Renault's 59 billion euros (S$92 billion).
According to The Financial Times, Mr Ghosn was working on a merger of the two carmakers that Nissan opposed because it feared the Japanese company could be relegated to a secondary role.
Jeff Kingston, director of Asian Studies at Temple University Japan, told AFP that Mr Ghosn was "a victim of his own hubris and success".
"He trampled on Japanese cultural norms with his flamboyant glory-hogging ways, and his massive compensation incited jealousies and invited retaliation," he told AFP.
Local media reported that Nissan's representative director Greg Kelly, who was arrested along with Mr Ghosn, ordered other executives to "hide salaries".
Some compensation due to other executives reportedly ended up going to Mr Ghosn, although it is not clear how the scheme worked.
Public broadcaster NHK reported that Nissan had paid "huge sums" to provide Mr Ghosn with luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam "without any legitimate business reason". AFP
- Renault and Nissan appear to be lurching towards war
- Bollore: The Renault exec now in the driver's seat