Three weeks after his arrest at a Tokyo airport, Carlos Ghosn is set to be indicted for financial crimes as soon as Monday, according to people familiar with the matter, bringing to a head the case that has sent shock waves through the global auto industry.
Prosecutors are also planning to re-arrest Ghosn on new charges not yet made public, said the people, asking not to be identified because the information is private.
In the first sign of blowback from the scandal for Nissan, the carmaker is also set to be indicted for breaching Japan’s Financial Instruments and Exchange Law by making misstatements on securities reports, the Nikkei newspaper reported. It is also thought that former Representative Director Greg Kelly, who is accused of aiding Ghosn to understate his income and misuse Nissan assets, will be indicted, the report said.
According to sources close to the investigation on Thursday, Ghosn admitted to prosecutors that he signed documents on his post-retirement pay that were unreported in the company’s securities statements.
The act of signing, which Ghosn allegedly denied shortly after his arrest on Nov. 19, is said to be seen by prosecutors as proof that the former chairman of the Japanese automaker violated the law by failing to report part of his remuneration.
But the sources said the 64-year-old has argued that the signing of the papers was only to confirm his understanding of the documents’ contents, apparently maintaining that he did not commit financial misconduct.
Representatives of the Tokyo District Public Prosecutor’s Office have declined to comment on the allegations.
An indictment would take the prosecutors’ pursuit of Ghosn, who was arrested on Nov. 19, to the next level.
Nissan has since ousted Ghosn as chairman. While he remains at the helm of Nissan’s French partner Renault SA, he has been replaced on an interim basis. Tension within the Franco-Japanese partnership held together by Ghosn for two decades has all but exploded into the open since his incarceration.
Nissan “identified serious misconduct related to the reporting of Mr. Ghosn’s compensation,” the company said in an emailed statement. “The company has been providing information to the … Public Prosecutor’s Office and has been fully cooperating with its investigation. We will continue to do so.”
Ghosn’s re-arrest would be based on suspected underreporting of his income for the past three fiscal years, the people said.
Thus far, prosecutors are said to suspect him of doing so for the five fiscal years ending in March 2015. Ghosn has been arrested on suspicion of violating the law by reporting only ¥5 billion ($44 million) of his ¥10 billion remuneration during the five years.
Monday is set to be the last day of Ghosn’s current detention, which has already been extended once. If convicted, Ghosn could face up to 10 years in prison, prosecutors have said.
IN FIVE EASY PIECES WITH TAKE 5