Carlos Ghosn has for the first time given his version of the events that led to his arrest in Tokyo seven weeks ago on suspicion of financial misconduct.
"Your honor, I am innocent of the accusations against me," Ghosn said Tuesday in Tokyo District Court. Wearing a dark suit and plastic slippers, the former Nissan (NSANY) chairman told the judge he had been wrongly accused.
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Ghosn, who remains chairman and CEO of Renault (RNSDF), had entered the court in handcuffs with a rope around his waist, as is customary for detainees in Japan's legal system. He was noticeably thinner, with his normally jet black hair graying at the roots.
The global business leader's spectacular downfall following his arrest in November has shaken the international auto industry and strained the alliance he built between Nissan, Renault and Mitsubishi Motors (MMTOF).
Prosecutors suspect Ghosn, 64, of under-reporting his income by tens of millions of dollars and transferring personal investment losses to Nissan.
Ghosn's version of events
Speaking in court, Ghosn said he had "always acted honorably and legally" and with the knowledge and approval of the appropriate executives inside the company.
Ghosn expressed "love and appreciation for Nissan," telling the court: "I have dedicated two decades of my life to reviving Nissan. I worked on these goals day and night."
According to a written version of his remarks that was issued via a representative before Tuesday's proceedings, Ghosn said four major companies, including Ford (F) and GM (GM), had made "very attractive" offers to recruit him while he was Nissan CEO. He chose to stay put, but kept a record of the compensation the rivals offered as "an internal benchmark ... it had no legal effect."
He insisted he had been "unfairly detained based on meritless and unsubstantiated accusations."
A Brazilian-born French citizen who grew up in Lebanon, Ghosn requested the open hearing at a Tokyo court to seek an explanation on why he has been held so long.
His appearance generated significant public interest, with hundreds of people lining up for just a handful of seats inside the court. No photography is permitted during proceedings.
Judge says Ghosn is a flight risk
The auto industry legend has been locked in a Tokyo jail cell since November 19, and the court has already approved a request from prosecutors to extend his detention until January 11.
Ghosn's lawyers said at a news conference after the court hearing that they expect him to be either indicted or arrested yet again on new allegations. They plan to keep trying to get him released on bail.
The judge in the court hearing said that keeping Ghosn in jail during the investigation was justified because he posed a flight risk and could conceal evidence.
Ghosn's legal team disputed those suggestions, arguing that he is too well known around the world to flee and wouldn't destroy evidence. They expressed fears that their client will remain in jail until his trial begins, which could take another six months.
"My greatest concern, and Mr. Ghosn's, is that he will be denied bail until the trial starts," Motonari Otsuru, Ghosn's chief defense lawyer, told reporters.
Ghosn and Nissan were indicted on December 10 on allegations that they under-reported his income by tens of millions of dollars between 2010 and 2015. That charge carries a maximum prison sentence of 10 years. Prosecutors are also investigating allegations that the practice went on for longer and that Ghosn temporarily shifted 1.85 billion yen ($16.6 million) of losses from his private investments onto a Nissan subsidiary in 2008.
In his remarks, Ghosn denied the allegations of under-reporting his income, saying that he "never received any compensation from Nissan that was not disclosed."
He also denied causing Nissan any losses by temporarily transferring to the company contracts he had taken out to protect the value of his salary in yen against market volatility.
"I am a U.S. dollar-based individual. My children live in the US and I have strong ties to Lebanon. ... I wanted predictability in my income in order to help me take care of my family," he said in the statement.
When the global financial crisis hit, Ghosn said his bank asked him for more collateral for the contracts, fund he said he couldn't raise. So he turned to Nissan for help.
A Nissan spokesman on Tuesday declined to comment specifically on Ghosn's remarks to the court or the legal proceedings.
"Nissan's internal investigation uncovered substantial and convincing evidence of misconduct" by Ghosn, the spokesman said. "The company's investigation is ongoing, and its scope continues to broaden."
No family visits
The case has sparked questions about the Japanese justice system and the ability of prosecutors to keep a person in jail for extended periods of time while investigations continue.
Visits from lawyers, family and friends are strictly controlled by prosecutors in Japan, making it difficult for suspects to establish a defense or give their side of the story to the media.
Otsuru said the court has so far prohibited Ghosn's family from visiting him during his detention.
Ghosn's son told French media over the weekend that Ghosn was being pressured into signing a confession written exclusively in Japanese, a language he does not understand. But Otsuru denied that claim, saying any statements prosecutors ask Ghosn to sign have to be translated.
"Mr. Ghosn has not been forced to sign a confession," he said.
While in jail, Ghosn has been ousted as chairman of Nissan and Mitsubishi Motors. He remains chairman and CEO of Renault, but the company has assigned his duties to other executives in his absence.
Nissan has said the alleged misconduct was first brought to its attention by a whistleblower. An internal investigation uncovered serious problems, according to the company, which led it to alert authorities in Japan.
Greg Kelly, the former Nissan director accused of helping Ghosn under-report his income, was released from jail in Japan on Christmas Day after being granted bail.
Kelly denies any wrongdoing. His wife said he had been wrongly accused as part of a power grab by Nissan executives targeting Ghosn — an allegation Nissan disputes.
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