President of Nissan Motor Co. Carlos Ghosn will be detained another 10 days after his arrest for suspicion of forging millions of dollars in revenue and abusing the property of the company's personal income, Japanese media reported on Wednesday.
The Nissan Motor Co. committee decided this week to decide whether to dismiss Ghosna and Greg Kelly's representative, who was also arrested on Monday because of suspicion of cooperating in the wrongdoing.
Their detention was extended on Wednesday for another 10 days, Kyodo News reported. The Tokyo court, as stated in the report, refused to comment.
According to Japanese law, suspects can be held for 20 days at a possible expense without getting an official indictment. Additional costs may be marked, resulting in longer custody. Until now neither Ghosn nor Kelly have been accused.
Ghosn is suspected of falsifying securities statements and filing $ 44.6 million in revenue from 2011 to 2015, and Kelly is suspected of collaborating with him, according to Tokyo prosecutors.
The maximum sentence, after being convicted for violating financial laws, is a suspect, 10 years in prison, 10 million yen ($ 89,000), or both.
Despite high-profile arrests, analysts have announced that impact on Nissan's auto sales will be minimal.
"I would be surprised if it had a profound impact on car sales," said Christopher Richter, auto-analyst at CLSA Securities Japan Co. "Consumers are enough to say," This car, the wheels may fall, so I will not buy it. This car company, executive, may have done something like this, but I like a car or not. "
Richter recorded sales losses that hit after the previous Nissan scandals were temporary. Distinctions recognized by the manufacturer in these scandals were more directly related to product quality, such as mileage, emissions, and plant inspections.
No matter what the executives might or may not have, they could work to make the car less expensive, Richter said.
Renault SA from France, a partner since the late 1990s, now with 43 percent stake in Nissan, has kept Ghosna as the chief executive at the extraordinary committee meeting on Tuesday, while appointing a switch to his place. The Renault committee also asks Nissan to pass the details of the investigation.
From the very beginning, Nissan sought to distance himself from being arrested.
Chief Executive Officer Hiroto Saikawa condemned Ghosna and Kelly as "major plans", and it was clear that he thought they should be removed at a meeting on Thursday.
Ghosn, 64, Renault in 1999 sent Renault to Nissan, and from 2001 to the previous year was Nissan's Executive Director. He became the chief executive of Renault 2005, leading two major car manufacturers at the same time. In 2016, he became President of Mitsubishi Motors.
Ghosn is attributed to approaching Nissan from close bankruptcy.
Kelly, 62, joined Nissan in the US in 1988 and became a member of the board in 2012. His background over the years was in human resources management and alliances. He graduated from the University of Loyola Law School and graduated from the college of Augustan College.
When Saikawa was asked whether such action might have been undiscovered for five years, maybe longer, he accused Nissan of the darkness of the checks and balances and stressed that the force was too focused on Ghosna.
Nissan's overall performance will not be hurt because Ghos's absence is "as long as the executive team pulls," said Janet Lewis, an analyst at Macquarie Research.
The fact that this case initially caught the whistle's attention pointed to how the system works, she said.
Nissan shares were deposited on Tuesday after the scandal appeared, falling more than 5 percent. The stock recovered moderately in Thursday's trading on the Tokyo Stock Exchange, closing 0.4 percent.
Masahiro Akita, Credit Suisse Auto-analyst, said he was astonished at the Ghost arrest reports.
But he believes most of Nissan's operations will remain as business as usual, while uncertainty about the brand image remains.
"It is not realistic to think that the alliance will suddenly change how it is operating now," he said, pointing out that car makers share platforms, or basic parts on which vehicles are built, as well as parts of the car.
"You can not easily go back to it."
Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama
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