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Japan’s Nissan Motor Co. was indicted Monday along with its ousted chairman, Carlos Ghosn, and former director Greg Kelly. The indictments center on allegations that Ghosn misused company funds and underreported more than $44 million in income during a five-year span. Prosecutors in Japan allege that he had help from Kelly.

Corporate defense lawyers Brad Karp and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison in New York are defending Ghosn. They have not spoken publicly about the allegations.

Ghosn also has hired Motonari Otsuru, a prominent former prosecutor now in private practice, to represent him in Japan, according to reports from Japanese media.

In the wake of the indictments, Nissan’s stock price dropped more than 2.5 percent, and the company issued a statement of apology.

“Nissan takes this situation extremely seriously,” the company stated. “Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret.”

Meanwhile, prosecutors announced that they were poised to re-arrest Ghosn, which would give investigators more time to determine whether he underreported additional income in filings to the Tokyo Stock Exchange, according to CNN.

Under Japanese law, suspects can be held for up to 20 days without being charged with a crime. Ghosn, 64, has been in jail for three weeks. If convicted of the allegations underlying his recent indictment, he could face 10 years in prison and/or a fine of 10 million yen, which is about $88,300, according to Reuters. Nissan could be fined 700 million yen, or $6.2 million.

The BBC reports that the conviction rate in Japan is more than 99 percent.

Nissan’s board of directors voted to remove Ghosn as chairman of the company shortly after his arrest in Tokyo on Nov. 19, and its partner Mitsubishi Motors Corp. ousted Ghosn as chair Nov. 26.

But while Nissan and Mitsubishi have severed ties with Ghosn, he remains for now the chairman and CEO of the companies’ French partner, carmaker Renault, which has appointed its chief operating officer to temporarily fill Ghosn’s position.

 

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