Nissan Motor Co. Ltd.'s former CEO and Chairman Carlos Ghosn denied a litany of allegations of financial misconduct at a Tokyo court hearing Jan. 8, various media reported, in what was his first public appearance since his arrest Nov. 19, 2018.
In a prepared statement published by Reuters and CNBC, Ghosn denied trying to camouflage "post-retirement compensation," justified transferring his personal, loss-making currency hedges to the company and highlighted his achievements in restoring the Japanese automaker to financial health during almost two decades at the helm.
It was the first opportunity Ghosn has had to defend himself in person against the allegations of impropriety, which have cast doubt over the future of Nissan's alliance with French partner Renault SA, still led by Ghosn, and which analysts say have done irreparable damage to the world-renowned automotive executive's career, regardless of their veracity.
"I am innocent of the accusations made against me. I have always acted with integrity and have never been accused of any wrongdoing in my several-decade professional career. I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations," Ghosn's statement concluded.
Ghosn said he never entered into any "binding contract" with Nissan to be paid sums of money that were not officially disclosed, in reference to accusations that he had maneuvered to defer part of his salary until after his departure in order to publicly declare a lower salary that would be more acceptable and in line with Japanese practices and business culture.
"I understood that any draft proposals for post-retirement compensation were reviewed by internal and external lawyers, showing I had no intent to violate the law," the statement said.
Regarding the currency hedge, Ghosn said the only alternative to transferring it to Nissan would be to resign from the company and use his "retirement allowance" to cover his position, something he would not consider as he guided the automaker through the turmoil of the economic crisis. "A captain doesn't jump ship in the middle of a storm," Ghosn's statement said.
Ghosn's lawyer, Motonari Otsuru, said in a press conference in Japan on Jan. 8 that the transfer took place with Nissan's consent if Ghosn covered any resulting losses from the bet. Ghosn said in his statement that no losses were incurred when the transaction was eventually closed.
Addressing the transfer of what media reports say was a $14.7 million payment to Saudi Arabian associate Khaled Jaffali, Ghosn said it was compensation for Jaffali's company's success in resolving distribution problems in the Gulf region and for assisting negotiations over a Saudi Arabian manufacturing plant.
The shocking downfall of one of the automotive world's best-known figures has exposed long-simmering discontent within Nissan regarding Ghosn's personal style of leadership and a sense of injustice over Nissan's lack of influence in its partnership with Renault, Nissan's biggest shareholder, despite its superior financial position.
That steadily souring sentiment likely had a strong influence in Nissan's decision to flag suspicions of fraud to prosecutors after an internal investigation, according to a Europe-based analyst who spoke to S&P Global Market Intelligence on the condition of anonymity. Even an acquittal would be powerless to reverse the damage Ghosn's arrest and ouster from Nissan has caused by this stage, the analyst said.
"His fate is sealed. He will never come back to Renault," the analyst said.
Renault's board has refused to sack its CEO and chairman, standing by a presumption of innocence until the allegations against him are proven. "The complexity of this thing is in the fact that nothing is black or white. Everything is grey," the analyst said.
Nissan itself has been charged for making false disclosures in annual filings to Japan's financial services regulator, even though it originally flagged fraud concerns to prosecutors.
Tuesday's hearing was not the beginning of Ghosn's trial but rather a one-off session held at his request to be informed of the reason for his prolonged detention. Prosecutors have re-arrested Ghosn twice by introducing new charges, enabling them to extend his detention by about 20 days each time.