Embattled former Nissan Motor Co. Chairman Carlos Ghosn denied allegations of financial misconduct Tuesday in his first chance to publicly defend himself after nearly 50 days behind bars.

“I am innocent of the allegations made against me,” Ghosn told the Tokyo District Court in English, adding that he has been “wrongly accused and unfairly detained.”

Dressed in a dark navy blue suit, a haggard-looking Ghosn — handcuffed and with a rope tied around his waist — entered the courtroom at about 10:30 a.m. He was given some 20 minutes to tell his side of the story, including translation time.

Before he addressed the court, the handcuffs were removed.

Ghosn, who joined Nissan in 1999 and is credited with saving it from bankruptcy, denied the prosecutors’ allegations and said he never received undisclosed compensation or shifted his own investment losses to the firm.

He stressed that working at the Yokohama-based carmaker and growing the alliance with Renault SA was his pleasure.

“I have a genuine love and appreciation for Nissan,” he said at the start of his remarks. Although he was seated during his statement and looked fatigued, he spoke firmly throughout.

More than 1,000 people, including some Nissan shareholders, lined up for the 14 courtroom seats available to the public.

“He is a person who reformed Nissan by doing things Japanese people could not,” said Masataka Obinata, 67, a Nissan shareholder who lives in Tokyo said while standing in line. “I want to hear what statements he will make.”

The court session took place after Ghosn’s legal team requested an explanation from judges on why he is still in custody. Under the Code of Criminal Procedure, those being detained, their lawyers and families are allowed to make such an appeal.

The judge stressed the necessity of extended detention based on “flight risk” and possible “destruction of evidence” along with statements and evidence given so far.

The court approved a request by the Tokyo District Public Prosecutor’s Office to extend his detention on Dec. 31, as Ghosn had been served another warrant on Dec. 21 for alleged aggravated breach of trust over the transfer of investment losses worth about ¥1.85 billion from his personal asset management firm to Nissan in 2008.

Nissan’s shares had plunged significantly due to the global financial crisis at the time and damaged Ghosn’s equity-linked assets, which he used as collateral for his foreign exchange contracts. His contractor, Shinsei Bank, had asked him to provide more collateral, Ghosn said.

He could have paid if he had stepped down from the Nissan CEO post and taken his retirement money.

“But my moral commitment to Nissan would not allow me to step down during that time. A captain doesn’t jump ship in the middle of a storm,” he said.

He added he had actually received generous offers from other auto giants, including Ford and GM, but turned them down due to his responsibility at Nissan.

Ghosn said he temporarily transferred the contract to Nissan to take on collateral, but his legal team contends that the contract was signed by the three parties — his asset management firm, Nissan and Shinsei Bank — and stipulated that Nissan wouldn’t incur any costs.

The prosecutors also suspect that Ghosn paid $14.7 million to Khaled Juffali, a Saudi Arabian businessman, for providing a credit guarantee to Shinsei to help Ghosn.

But Ghosn told the court that he was simply paying services that Juffali had done for Nissan in Saudi Arabia, such as reconstructingsales channels and helping the automaker build a factory.

Speaking at the Foreign Correspondents’ Club of Japan later in the day, Ghosn’s lawyers expressed concern over when he will be released.

“There are many cases in which bail is not approved before the first hearing of a trial,” said Motonari Otsuru, one of the lawyers.

It will probably take at least six months for a trial to take place even with the current allegations, Otsuru said.

“This is what we are concerned about the most as the defense counsel. We’ve told Mr. Ghosn about this and we believe he is also troubled,” he said, adding that the defense team will continue to seek Ghosn’s release on bail.

Later in the day, the lawyers filed a request with the Tokyo District Court to nullify Ghosn’s detention.

Prosecutors first arrested Ghosn and his close aide Greg Kelly, former representative director at Nissan, on Nov. 19 for allegedly underreporting some ¥5 billion of Ghosn’s ¥10 billion salary between 2011 and 2015.

Kelly was released on bail Dec. 25. He suffers from spinal stenosis and is being treated at a hospital in Ibaraki Prefecture.

Listed firms are required to disclose information about executives who receive ¥100 million or more in remuneration and the amount of their pay in the companies’ annual financial report.

Some media outlets have reported that Ghosn’s annual pay was actually around ¥2 billion, but he is alleged to have only stated half of it, as the rest was supposed to be paid after he left the company.

Ghosn has told prosecutors it was unnecessary to report some of his remuneration because the payment had yet to be settled, according to different sources with knowledge of the investigation. He was also quoted as saying that the remaining remuneration was just an amount he had hoped to receive.

Ghosn told the court that he has never received money that was not disclosed and would breach laws.

The post-retirement compensation that went unreported for eight years is believed to have totaled more than ¥8 billion.

In a development that surprised the nation Dec. 20, the district court dismissed a request from the prosecutors to extend the detention over the underreporting charge.

But Ghosn was served a new warrant the following day over the alleged investment loss transfer.

The case has sparked criticism of Japan’s criminal justice system because of the repeatedly extended detention period.

Nissan, which said it was cooperating with prosecutors after conducting its own monthslong investigation, promptly removed Ghosn as chairman and Kelly as representative director after their arrests. Mitsubishi Motors Corp., the third party in the three-way alliance, also dismissed Ghosn from the post of chairman. Ghosn is known as the architect of the three-way alliance of Renault, Nissan and Mitsubishi Motors.

On Tuesday, Nissan management refused to comment on Ghosn’s claim.

“It is not something I should comment on. I want to focus on stabilizing the company,” Nissan CEO Hiroto Saikawa said.

Information from Kyodo added

Full text of statement by Nissan’s Ghosn at Tokyo court

The following is the full text of former Nissan Motor Co. Chairman Carlos Ghosn’s statement at the Tokyo District Court on Tuesday, provided by his lawyers in Tokyo:

Statement of Carlos Ghosn

Your Honor,

I am grateful to finally have the opportunity to speak publicly. I look forward to beginning the process of defending myself against the accusations that have been made against me.

First, let me say that I have a genuine love and appreciation for Nissan. I believe strongly that in all of my efforts on behalf of the company, I have acted honorably, legally, and with the knowledge and approval of the appropriate executives inside the company — with the sole purpose of supporting and strengthening Nissan, and helping to restore its place as one of Japan’s finest and most respected companies.

Now I would like to address the allegations.

1. The FX Forward contracts

When I first joined Nissan and moved to Japan almost 20 years ago, I wanted to be paid in U.S. dollars, but was told that that was not possible and was given an employment contract that required me to be paid in Japanese yen. I have long been concerned about the volatility of the yen relative to the U.S. dollar. I am a U.S. dollar-based individual — my children live in the U.S. and I have strong ties to Lebanon, whose currency has a fixed exchange rate against the U.S. dollar. I wanted predictability in my income in order to help me take care of my family.

To deal with this issue, I entered into foreign exchange contracts throughout my tenure at Nissan, beginning in 2002. Two such contracts are at issue in this proceeding. One was signed in 2006, when the Nissan stock price was around ¥1,500 and the yen/dollar rate was around 118. The other was signed in 2007, when the Nissan stock price was around ¥1,400 and the yen/dollar exchange rate was around 114.

The 2008-2009 financial crisis caused Nissan’s shares to plummet to ¥400 in October 2008 and to ¥250 in February 2009 (down more than 80 percent from its peak) and the yen/dollar exchange rate dropped below 80. It was a perfect storm that no one predicted. The entire banking system was frozen, and the bank asked for an immediate increase in my collateral on the contracts, which I could not satisfy on my own.

I was faced with two stark choices:

1. Resign from Nissan, so that I could receive my retirement allowance, which I could then use to provide the necessary collateral. But my moral commitment to Nissan would not allow me to step down during that crucial time; a captain doesn’t jump ship in the middle of a storm.

2. Ask Nissan to temporarily take on the collateral, so long as it came to no cost to the company, while I gathered collateral from my other sources.

I chose option 2. The FX contracts were then transferred back to me without Nissan incurring any loss.

2. E (sic)

E (sic) has been a long-time supporter and partner of Nissan. During a very difficult period, D Company (sic) helped Nissan solicit financing and helped Nissan solve a complicated problem involving a local distributor — indeed, E (sic) helped Nissan restructure struggling distributors throughout the Gulf region, enabling Nissan to better compete with rivals like Toyota, which was outperforming Nissan. E (sic) also assisted Nissan in negotiating the development of a manufacturing plant in Saudi Arabia, organizing high-level meetings with Saudi officials.

D Company (sic) was appropriately compensated — an amount disclosed to and approved by the appropriate officers at Nissan — in exchange for these critical services that substantially benefited Nissan.

3. The FIEL Allegations

Four major companies sought to recruit me while I was CEO of Nissan, including Ford (by Bill Ford) and General Motors (by Steve Rattner, the then-Car Czar under President Barack Obama). Even though their proposals were very attractive, I could not in good conscience abandon Nissan while we were in the midst of our turnaround. Nissan is an iconic Japanese company that I care about deeply. Although I chose not to pursue the other opportunities, I did keep a record of the market compensation for my role, which those companies offered me if I had taken these jobs. This was an internal benchmark that I kept for my own future reference — it had no legal effect; it was never shared with the directors; and it never represented any kind of binding commitment. In fact, the various proposals for non-compete and advisory services post-retirement made by some members of the board did not reflect or reference my internal calculations, underscoring their hypothetical, non-binding nature.

Contrary to the accusations made by the prosecutors, I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed. Moreover, 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. For me, the test is the “death test”: if I died today, could my heirs require Nissan to pay anything other than my retirement allowance? The answer is an unequivocal “No.”

4. Contribution to Nissan

I have dedicated two decades of my life to reviving Nissan and building the Alliance. I worked toward these goals day and night, on the earth and in the air, standing shoulder to shoulder with hardworking Nissan employees around the globe, to create value. The fruits of our labors have been extraordinary.

We transformed Nissan, moving it from a position of a debt of ¥2 trillion in 1999 to cash of ¥1.8 trillion at the end of 2006, from 2.5 million cars sold in 1999 at a significant loss to 5.8 million cars sold profitably in 2016. Nissan’s asset base tripled during the period.

We saw:

The revival of icons like the Fairlady Z and Nissan G-TR;

Nissan’s industrial entry into Wuhon (sic), China, St. Petersburg, Russia, Chennai, India, and Resende, Brazil;

The pioneering of a mass market for electric cars with the Leaf;

The jumpstarting of autonomous cars;

The introduction of Mitsubishi Motors to the Alliance; and

The Alliance becoming the number one auto group in the world in 2017, producing more than 10 million cars annually.

We created, directly and indirectly, countless jobs in Japan and reestablished Nissan as a pillar of the Japanese economy.

These accomplishments — secured alongside the peerless team of Nissan employees worldwide — are the greatest joy of my life, next to my family.

5. Conclusion

Your Honor, I am an innocent (sic) 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.

Thank you, your Honor, for listening to me.

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