Nissan's Ghosn re-arrested, chances of imminent bail dashed

By Kiyoshi Takenaka

TOKYO (Reuters) - Japanese prosecutors re-arrested Nissan Motor Co Ltd's ousted chairman Carlos Ghosn on Friday on fresh allegations of making Nissan shoulder $16.6 million in personal investment losses, dashing chances he would be released on bail imminently.

The move comes a day after a Tokyo court unexpectedly rejected prosecutors' request to extend Ghosn's detention, which raised the possibility that he could go free on bail as early as Friday.

The re-arrest means he could be detained for at least another 10 days in a Tokyo jail, where he has been confined since he was arrested last month on initial allegations of financial misconduct.

The Tokyo prosecutor said the new allegations were based on suspicions that around October 2008, Ghosn shifted personal trades to the automaker so that he could avoid paying for 1.85 billion yen ($16.6 million) in losses.

His lawyer, Motonari Otsuru, was not available for comment. The lawyer has previously declined to return calls regarding the Ghosn case.

The Tokyo court said in a statement that the lawyer for Ghosn's former deputy Greg Kelly, who was arrested along with Ghosn, has requested his client's release. Kelly's detention extension was rejected along with Ghosn's.

The dramatic turn of events on Friday came hours after Ghosn, through his lawyer and quoted by Japanese public broadcaster NHK, vowed to restore his good name in court and to hold a news conference after his release.

"Things as they stand are absolutely unacceptable," he was quoted as saying. "I want to have my position heard and restore my honour in court."

Television camera crews had gathered outside the Tokyo jail on Friday morning in hopes of catching sight of Ghosn being released.

MULTIPLE ALLEGATIONS

Ghosn was initially arrested on Nov. 19 for allegedly understating his income by about half over a five-year period from 2010. He was later re-arrested for a similar alleged crime covering the past three years.

Nissan said after his arrest that it unearthed multiple instances of possible wrongdoing in an internal investigation triggered by a whistleblower.

The internal probe is ongoing, and has included allegations of diverting company funds to pay for personal expenses. Sources have told Reuters that investigators have been looking into the use of an internal "CEO Reserve" fund and the role of overseas subsidiaries in alleged financial misconduct.

The Ghosn case has put Japan's criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defence lawyers from being present during interrogations, which can last eight hours a day.

The case also marked a dramatic fall for the leader of the Nissan-Renault-Mitsubishi alliance who was once hailed for rescuing Nissan from the brink of bankruptcy. Nissan Chief Executive Hiroto Saikawa has since called for changes to weaken the clout of controlling shareholder Renault SA.

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.

While Nissan ousted Ghosn from his role as chairman shortly after the initial arrest, Renault has so far not replaced him.

A Nissan spokesman declined to comment on the re-arrest, saying only that the internal investigation was ongoing and expanding into new areas.

($1 = 111.2100 yen)

(Reporting by Kiyoshi Takenaka, Ritsuko Ando, Tim Kelly, Linda Sieg and Malcolm Foster; Writing by Ritsuko Ando; Editing by Stephen Coates and Christopher Cushing)