Prosecutors wanted to keep former Nissan chairman in custody for a further 10 days

This article is more than 1 year old

This article is more than 1 year old

A Japanese court has unexpectedly turned down a request from prosecutors to extend Carlos Ghosn’s period of detention over financial misconduct allegations.

The Tokyo district court said it had rejected the request to keep the former Nissan chairman in custody for a further 10 days – an unusual move that came amid international criticism of the power of Japanese investigative authorities.

Ghosn has spent a month at a detention centre in the Japanese capital after his arrest on 19 November for allegedly underreporting his pay by about five billion yen (£35m) between 2011 and 2015.

Prosecutors had requested the extension over an additional allegation that Ghosn, along with the former Nissan executive Greg Kelly, continued to underreport his income through to March this year, increasing the overall amount by four billion yen.

They have not been formally charged over the second allegation.

Ghosn’s immediate future is uncertain, however. If a court accepts a bail request by his lawyers, he could be released as early as Friday.

But prosecutors are expected to appeal against the court decision and could attempt to rearrest him on a new charge.

Experts said the court’s refusal to grant the prosecutors’ request could mark a shift in Japanese legal authorities’ attitude towards detaining suspects for long periods, during which they are interrogated without their lawyers present.

“They are very nervous about criticism of their approach toward detention,” said Masashi Akita, a defence lawyer. “I think this case has had a big impact on the practice of Japanese justice.”

Ghosn faces up to 10 years in prison, a fine of 10 million yen, or both, if he is found guilty. The conviction rate in Japan is above 99%.

The scandal raised questions about the state of corporate governance in Japan and cast doubt on the future of Nissan’s alliance with Renault.

Ghosn, 64, was lauded as Nissan’s saviour after he rescued the carmaker from near bankruptcy two decades ago.

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Nissan sacked him as chairman five days after his arrest but this week said it had yet to decide on a replacement. He remains head of Renault, which has said his compensation package had complied with law and governance guidelines.

Reuters said it had seen documents showing executives at both companies were involved in discussions about compensating Ghosn out of the public eye.

The allegations aside, Ghosn is alleged to have misused Nissan money to fund his lavish lifestyle, including luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam.

Ghosn and Kelly have not issued statements during their detention, but media reports said both men have denied the allegations.