By Kiyoshi Takenaka and Tim Kelly
TOKYO (Reuters) - Nissan Motor Co Ltd's ousted Chairman Carlos Ghosn declared he was innocent on Tuesday in his first public appearance since his arrest in November, telling a Tokyo court that he was wrongly accused of financial misconduct.
"I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations," he told the Tokyo District Court, according to a prepared statement which was obtained by Reuters.
"Contrary to the accusations made by the prosecutors, I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed."
Ghosn, credited with rescuing Nissan from near-bankruptcy two decades ago, appeared thinner than before his arrest as he entered a court in handcuffs and a rope around his waist. He wore a suit without a tie, and his dark hair showed grey roots.
A crowd of journalists and television crew gathered outside the court house while earlier, 1,122 people lined up for 14 court seats assigned by lottery, highlighting the level of public interest in the case of the once-feted executive.
The hearing, requested by his lawyers, was held to explain the reasons for his prolonged detention since his Nov. 19 arrest. Presiding Judge Yuichi Tada read out the charges and said Ghosn was being detained due to flight risk and the possibility that he may conceal evidence.
Ghosn's Japanese lawyers are also expected to speak in his defense at a news conference scheduled later in the day. The legal team is headed by former prosecutor Motonari Otsuru.
INVESTMENT LOSSES AND SAUDI PAYMENTS
Ghosn has been formally charged with under-reporting his income. The 64-year-old executive has also been arrested, but not yet indicted, on allegations of aggravated breach of trust in shifting personal investment losses worth 1.85 billion yen ($17 million) to the carmaker.
Regarding allegations that he transferred losses to Nissan, Ghosn said he had asked the company to temporarily take on collateral for his foreign exchange contracts. He said he did this to avoid the only other choice he had, which was to resign and use his retirement allowance for collateral.
"But my moral commitment to Nissan would not allow me to step down during that crucial time," he said. "A captain doesn't jump ship in the middle of a storm."
Ghosn also said the contracts were transferred back to him, and that Nissan had not incurred any loss.
Ghosn is also accused of making $14.7 million in payments to Saudi businessman Khaled Al-Juffali using Nissan funds in exchange for arranging a letter of credit to help with his investment losses.
Ghosn said in his prepared remarks that Juffali's company was compensated for "critical services that substantially benefited Nissan", including soliciting financing and solving problems involving a local distributor.
The Khaled Juffali Company also issued a statement on Tuesday saying it had received the payments for legitimate business purposes.
The case has rattled Nissan's alliance with French automaker Renault SA (PA:), where Ghosn still remains chairman and chief executive. He had been pushing for a deeper tie-up between the pair, including potentially a full merger at the French government's urging, despite strong reservations at Nissan.
His arrest has also put Japan's criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defense lawyers from being present during interrogations that can last eight hours a day.
Ghosn, who was arrested first on Nov. 19, has been re-arrested twice on different charges since then, a tactic often used by Japanese prosecutors to keep suspects in detention.
He has been held at the Tokyo Detention Center, a spartan facility where small rooms have a toilet in the corner and no heater - a far cry from the jet-setting lifestyle Ghosn was accustomed to. His son, Anthony Ghosn, said his father had lost 10 kgs (22 pounds) during his detention, according to France's weekly Journal du Dimanche.
Under Japanese law, suspects can be detained without charges for up to 23 days, and then re-arrested on separate allegations.
On Dec. 31, the Tokyo District Court granted prosecutors' request to extend Ghosn's detention by 10 days until Jan. 11.
Nissan, which has ousted Ghosn from its board, has said a whistleblower investigation also uncovered personal use of company funds and other misconduct.