Carlos Ghosn Can Remain in Tokyo Jail for 10 More Days

PARIS — A Tokyo court approved a 10-day extension of jail time for Carlos Ghosn, head of the Renault-Nissan alliance, on Friday as prosecutors assess allegations of financial misconduct. An ocean away, the corporate titan’s problems were on show at the Group of 20 meeting: President Emmanuel Macron of France, where Renault is based, planned a side discussion with Japan’s prime minister on the alliance.

Ghosn, a charismatic leader in the auto industry, is being investigated after a whistleblower within Nissan, the Japanese automaker, alleged he vastly understated his compensation on securities filings. He has been in detention since Nov. 19, when he was arrested on his private jet soon after landing at Tokyo’s Haneda Airport.

Ghosn, who forged the alliance as a groundbreaking industry model for sharing technology and cost savings, has yet to be charged. But the Nissan board voted unanimously to fire him as chairman last week. Mitsubishi Motors, a Japanese automaker that joined the alliance in 2016, removed him as its chairman Monday.

Greg Kelly, Ghosn’s former chief of staff and a Nissan board member, who was arrested at the same time, will also be detained for 10 more days. A former head of human resources and an American, Kelly has been described by the company as a “mastermind” of the alleged financial wrongdoing. Both men were in Tokyo for a board meeting.

Under Japanese law, prosecutors can detain suspects for up to 22 days without filing charges, and can legally question them without a lawyer present.

The extended detentions give the Japanese authorities more time to interrogate the men, search Nissan’s offices for evidence and determine whether to press charges. Prosecutors have said they suspect Ghosn earned around 10 billion yen, or about $88 million, at Nissan from 2011 to 2015 but reported only half of it. The other half was to be parceled out as deferred compensation after Ghosn, 64, retired.

Kelly is also alleged to have overseen the surreptitious purchase of millions of dollars’ worth of housing for his boss through a Dutch company, Zi-A Capital, whose financial reports are opaque. Ghosn kept homes in Paris, Amsterdam, Rio de Janeiro and Beirut.

Despite his accumulated wealth, Ghosn’s outsize compensation packages at Renault and Nissan were a matter of contention at both companies, and each had sought to rein in his pay. Ghosn received around 8 million euros, or about $9 million, from Renault in 2017 and about the same amount at Nissan.

Ghosn has denied the allegations, the Japanese public broadcaster NHK said this week. Kelly has also denied wrongdoing, according to his attorney, Yoichi Kitamura.

Kitamura told The New York Times that Kelly maintained that Ghosn had the right to set his own pay, and that the executive had decided to pay himself 1 billion yen a year as chief executive. Ghosn and Kelly are accused of underreporting his compensation in required securities filings. Kelly said the securities report did not understate the pay, Kitamura said. Kitamura said Kelly maintained that he had consulted with an outside lawyer about a plan to defer Ghosn’s compensation. Kelly said that he had asked that lawyer to get approval from Japan’s Financial Services Agency to ensure the plan was correct and that it did not need to be reported as current compensation, Kitamura said.

Kitamura said he did not know whether that lawyer had told Kelly that the plan was legal under Japanese law.

In France, where Renault is the biggest automaker, Ghosn’s arrest has had political ramifications, including for Macron. The company, in which the French government holds a large share, has said it is keeping Ghosn as chief executive and appointed an interim leadership team to steady the firm. Renault has described Ghosn as being “temporarily incapacitated.”

Bruno Le Maire, the finance minister, has stated several times that France has “no evidence” of wrongdoing by Ghosn, and called on Nissan to turn over its dossier. Last week, he asked his Japanese counterpart to come to Paris to make a joint public statement on the matter.

Macron will discuss the investigation with Prime Minister Shinzo Abe of Japan at the G-20 meeting in Buenos Aires, French media reported Friday.

Since Ghosn pulled Nissan from the brink of bankruptcy over a decade ago, it has become the alliance’s more profitable partner. In recent years, executives inside the company had raised the issue of rebalancing the relationship.

Renault holds a 43 percent stake in Nissan, and the Japanese company holds a 15 percent stake in Renault, the same share as the French government. There have been tensions within the alliance — which accounted for 10.6 million car sales last year — as Renault has been the dominant partner.

Thursday, officials from Renault and Nissan consulted in Amsterdam, where the alliance has its headquarters, and issued a statement that the board of directors of all three companies “individually and collectively emphatically reiterated their strong commitment to the alliance.” The Japanese officials dialed in by teleconference. Macron, who is facing low poll numbers and social unrest at home, can ill afford problems at Renault, which employs 47,000 people in France. Yet when he was France’s economy minister in 2015, he helped inflame concerns within Nissan about Renault. Macron, a former Rothschild banker, ordered a surprise increase in the French government’s stake in Renault, which was designed to double the state’s voting rights.

The move, which Ghosn opposed in a bitter fight with Macron, rattled Nissan. Nissan has no voting rights in Renault, despite its 15 percent stake. Nissan threatened to leave the alliance’s master agreement.

Some French newspapers have questioned why and how Ghosn was being held for weeks without charges. On Thursday, the deputy head of the Tokyo prosecutor’s office, Shin Kukimoto, rebuffed the criticism as naive.

“We do not unnecessarily keep people in custody for a long time,” Kukimoto said. “I do not criticize other countries’ systems just because they are different.”