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Reports say Japan prosecutors to keep Ghosn in 10 days Business News

This Friday, April 20, 2018, Nissan's President, Carlos Ghosn, talks during an interview in Hong Kong. Ghosn, who became one…

This Friday, April 20, 2018, Nissan’s President, Carlos Ghosn, talks during an interview in Hong Kong. Ghosn, who became one of the automotive industry’s most powerful executives by designing a turnaround at the Japanese manufacturer, was arrested on Monday and will be kicked for allegedly underreporting his income and abusing the company’s funds, said automaker. (AP Photo / Kin Cheung) Associated Press

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) – Nissan Motor Co. President Carlos Ghosn will be arrested for another 10 days after his arrest of suspicion of counterfeit income reports with millions of dollars and abuse the company’s personal profit benefits, Japanese media reported Wednesday.

Nissan’s board will meet on Thursday and decide if it will dismiss Ghosn and corporate representative Greg Kelly. He also arrested Monday on suspicion of collaborating in error.

Their prison was extended on Wednesday for another 10 days, Kyodo News reported. The Tokyo District Court, cited in the report, declined to comment.

According to Japanese law, suspects may be held for 20 days at any charge without official prosecution. Additional charges may be noted, resulting in longer detentions. Neither Ghosn nor Kelly has been charged so far.

Ghosn is suspected of under reporting $ 44.6 million in revenue from 2011 to 2015, according to Tokyo prosecutor.

Maximum penalty, in conviction for breaking financial and exchange laws, is 10 years in prison, a fine of 10 million yen ($ 89,000) or both.

Despite the high profile grips, analysts said the effect on Nissan’s car sales would likely be minimal.

“I would be surprised if it affects car sales very much,” says Christopher Richter, auto analyst for CLSA Securities Japan Co. “Consumers are demanding enough to say: This car can be wheeled off so I will not buy it. Executive may have done some sort of doubt, but I think about the car or not. “

Richter noted sales tips that hit former Nissan scandals were temporary. The discrepancies that automaker acknowledged in these scandals were more directly related to product quality such as mileage, emissions and plant inspections.

Renault SA of France, a partner since the end of the 1990s and now holds 43 percent of Nissan’s shares held as CEO of Ghosn in a rally card meeting Tuesday, naming the company’s headman, Thierry Bollore, in his place. The Renault Board also requests Nissan to share information about its internal investigation of Ghosn

Nissan tried to abandon arrests.

Managing Director Hiroto Saikawa condemned Ghosn and Kelly as “masterminds” and made it clear that he thought they would be removed on Thursday’s board meeting. .

Ghosn, 64, credited with reversing Nissan from near bankruptcy after being sent to Nissan by Renault in 1999. He served as Nissan’s Managing Director from 2001 to last year. He became Executive Director of Renault 2005, which led the two major car manufacturers at the same time. In 2016, he became president of Mitsubishi Motors Corp after Nissan took it into the alliance to help recover from an inspection scandal at the smaller automaker.

Kelly, 62, joined Nissan in the USA in 1988 and became a member of the Board from 2012. His background over the years has been in staff and alliance management. He holds a legal degree from Loyola University School of Law and a bachelor’s degree in public administration from Augustana College.

When Saikawa was asked how such actions could have been undiscovered for five years, maybe longer, he considered a dark control system and balances on Nissan and stressed that he believed Ghosn had too much power.

Nissan’s overall performance will not be harmed by Ghosn missing, “as long as the management team collapses,” said Janet Lewis, an analyst at Macquarie Research.

The fact that the case was originally raised by a whistleblower shows that the system worked, she said.

Nissan shares are thrown Tuesday after the scandal occurred and dropped by 5.5 percent. The stock recovered moderately in Wednesday’s trading on the Tokyo Stock Exchange and closed 0.4 percent.

Masahiro Akita, auto analyst with Credit Suisse, said he was upset by the news about Ghosn’s arrest.

But he thinks that the business at Nissan will mainly remain business as usual while remaining uncertain about the brand image.

“It is not realistic to believe that the alliance will suddenly change as it already works,” he said, listing the subframes of the car manufacturers or the basic components of which vehicles were built as well as the purchase of parts.

“You can not go back to it so easily.”

Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

On Instagram at https://www.instagram.com/yurikageyama/?hl=en/19659005]Copyright 2018 The Associated Press. All rights reserved. This material may not be published, transmitted, rewritten or redistributed.

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