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Carlos Ghosn re-arrested and thrown back in jail [UPDATE]

TOKYO — Tokyo prosecutors arrested Nissan's former chairman Carlos Ghosn on Thursday for a fourth time, on fresh allegations that cut short his brief time outside detention. Early in the morning, Ghosn was taken from his apartment in Tokyo to the prosecutors' office and then sent to the Tokyo Detention Center, the same facility where he spent more than three months following his arrest in November. He had been released on bail just a month earlier. It's unclear how long Ghosn may be detained under the latest arrest, which involves what prosecutors said was a new alleged crime. "My arrest this morning is outrageous and arbitrary," Ghosn said in a statement issued Thursday. "It is part of another attempt by some individuals at Nissan to silence me by misleading the prosecutors. Why arrest me except to try to break me? I will not be broken. I am innocent of the groundless charges and accusations against me." The prosecutors defended the move, saying the latest allegations are a new case requiring precautions to prevent Ghosn from destroying evidence. They allege $5 million in funds sent by a Nissan subsidiary to an overseas dealership were diverted to a company controlled by Ghosn. "We now have a totally different case, and we are only doing what we think is right," Shin Kukimoto, deputy chief prosecutor at the Tokyo District Prosecutor's Office, told reporters. "As a result of our investigation, we have a new case in which he must be detained, and we have appropriately obtained an arrest warrant from the court," he said. Ghosn, 65, was first arrested on Nov. 19 on charges of under-reporting his compensation. He was rearrested twice in December, including on breach of trust charges. The multiple arrests prolong detentions without trial and are an oft-criticized prosecution tactic in Japan's criminal justice system. The allegations in the most recent arrest cover three money transfers from 2015 through last year, according to the prosecutors. Kukimoto said the new allegation of breach of trust is different from an earlier charge made in January. The companies where the money was transferred to, the motives, and the alleged scheme are all different, he said. He refused to identify the three companies allegedly involved but said one company was in effect owned by Ghosn. Unlike an earlier case, in which Ghosn caused damage to Nissan to benefit himself and a business partner, this time it was merely "for his own personal benefit," Kukimoto said.

Japan minister launches counterattack after Ghosn blasts justice system

TOKYO — Japan's justice minister launched a rare and forceful public takedown of auto executive-turned-fugitive Carlos Ghosn after he blasted the country's legal system as allowing him "zero chance" of a fair trial as he sought to justify his escape to Beirut. After his dramatic flight to Lebanon last month, Ghosn spoke in public for the first time on Wednesday, saying he had been treated "brutally" by Tokyo prosecutors. He said they questioned him for up to eight hours a day without a lawyer present and tried to extract a confession out of him. In an effort to undo Ghosn's attempt to sway public opinion in his favor, Justice Minister Masako Mori followed shortly with a statement, translated into English and French, and held a news conference after midnight and again around 9:30 a.m. on Thursday morning to defend Japan's justice system. "I decided to do this because defendant Ghosn was looking to justify his unlawful exit from Japan by propagating a false recognition of our justice system," she said at the second news conference. "I felt that we needed to respond immediately to broadcast a correct understanding to people around the world." Ghosn, the former chief of Nissan and Renault, fled Japan last month as he was awaiting trial on charges of under-reporting earnings, breach of trust, and misappropriation of company funds, all of which he denies. Mori said Ghosn's escape from his trial in itself "could constitute a crime" that would not be tolerated in any country. "My impression in listening to him was that there were few statements that were backed by any real evidence," she said. "If he wants to prove his innocence, he should face fair trial proceedings here," she added, stressing that the allegations against him concerned financial crimes in Japan. "That would be the mark of a first-class businessperson and good citizen." Mori blasted Ghosn for violating his bail by fleeing the country "without showing a passport and breaking international rules that everyone in the world follows." "It was a breach of faith that can't be explained to our children," she said. The spotlight on Japan's justice system comes as Mori is set to host in April the United Nations' Congress on Crime Prevention and Criminal Justice, held once every five years.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.