Nissan to replace rock-star chairman amid arrest scandal

Media reports say Japan has rearrested Nissan Motor Co’s ousted chairman Carlos Ghosn for aggravated breach of trust

Media reports say Japan has rearrested Nissan Motor Co’s ousted chairman Carlos Ghosn for aggravated breach of trust

The new arrest warrant states that Ghosn conducted an "aggravated breach of trust" by allegedly transferring obligations on his own personal investment losses worth about ¥1.85bn ($16.6m) to Nissan, inflicting financial damage on the carmaker.

"If he was released early out of consideration for worldwide opinion, the court could be considered a hero of sorts since the impression would spread that Japanese courts were different from the prosecutors", the high-ranking prosecutor said. Aubrey Harwell, the USA lawyer for Kelly, an American, says he is innocent, and that Nissan insiders and outside experts had advised him the financial reporting was proper. Prosecutors have also accused him of continuing the practice into 2017 but haven't indicted him on that allegation yet. Otsuru's office didn't respond to a request for comment from CNN. The lawyer has previously declined to return calls for comment on the Ghosn case.

The arrest has heightened tensions between Nissan and Renault, casting doubt over the viability of their alliance and highlighting the rift between the French and Japanese manufacturers over their respective powers within each others' boardrooms. He was later charged with the same alleged financial crime over the past three years.

According to a source close to the investigation, Nissan would seek to bar Ghosn from their premises if he were to be released.

Prosecutors were stunned by the Tokyo District Court's rejection of their request to extend the detention of Carlos Ghosn, with some suggesting the court caved in to worldwide criticism of Japan's judicial system.

Since his arrest last month, the once jet-setting executive has languished in a tiny cell in a detention center in northern Tokyo, where he has complained about the cold and the rice-based menu.

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Ghosn and Nissan were indicted on December 10 for underreporting the executive's income by tens of millions of dollars. But his right-hand man, Kelly, may be released next week, with a request for bail filed Friday by Kelly's lawyer pending court approval. Mitsubishi was brought into the alliance in 2016 when Nissan purchased a 34-percent stake in its domestic rival following an emissions scandal in Japan.

In addition to being detained while prosecutors probe the case, he is also in pre-trial detention following the formal charges over the first set of allegations.

However, the arrest of Ghosn recently has managed to ruffle the hornet's nest and has urged Renault to hold an emergency meeting with all the shareholders of Nissan, as soon as practically possible.

Documents seen by Reuters showed that some discussions about compensating Ghosn out of the public eye were not confined to Nissan, but also included Renault executives.

Nissan has said a whistleblower investigation also uncovered personal use of company funds and other misconduct.

If Ghosn and Kelly are granted bail, conditions may require them to apply for permission to travel overseas. Renault has appointed interim management but kept Ghosn on the payroll.

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