TOKYO — Carlos Ghosn and his lawyers are laying out the most comprehensive case yet for his innocence, nearly two months after his arrest shook the auto business and tarnished the reputation of an industry titan.
Still, it may not be enough to free him from jail for months, as prosecutors try to build a case against the ousted Nissan Motor chairman and onetime leader of an automaking juggernaut that builds more than 10 million cars annually.
Mr. Ghosn’s chief defense lawyer in Japan said on Tuesday that prosecutors had no basis for holding him in jail on allegations that he improperly transferred personal losses to Nissan’s books, saying that board members had approved the transactions.
Late Tuesday, that lawyer, Motonari Otsuru, submitted a request to the court to release Mr. Ghosn from detention on the grounds that Nissan did not ultimately bear any losses and that he was not a flight risk.
The moves came hours after Mr. Ghosn appeared in court on Tuesday, his first public appearance since his arrest on Nov. 19. Mr. Ghosn, 64, fought back against the allegations, which include charges that he failed to report his full compensation from Nissan in filings with regulators. He declared that he had “acted honorably, legally, and with the knowledge and approval of the appropriate executives inside the company.”
The defense sets the stage for what could be a lengthy legal battle between Mr. Ghosn and Japanese prosecutors. And Mr. Ghosn may remain in custody for months. Mr. Otsuru, a former prosecutor, said it was possible Mr. Ghosn could spend up to six more months in jail, as it was typical for Japanese courts to detain suspects until the start of their trials.
“There are documents that have to be investigated in both Japanese and English, which will take time,” Mr. Otsuru said. “Six months will be needed before being able to go to trial.”
Mr. Ghosn has been in jail since his November arrest, throwing into turmoil a vast alliance between Nissan and Mitsubishi Motors of Japan and Renault of France. Nissan, which removed Mr. Ghosn as chairman that month, has said that its investigation into his actions “uncovered substantial and convincing evidence of misconduct,” and that its “scope continues to broaden.”
Last month, Mr. Ghosn and Nissan itself were indicted on charges that they had withheld millions of dollars of his income from Nissan’s financial filings for years when he was both chairman and chief executive of the company.
Mr. Ghosn and his lawyers portrayed him on Tuesday as a dedicated executive committed to overseeing the alliance. His actions, they said, were disclosed to and approved by other company officials. In his statement to the court, Mr. Ghosn said that he had “never received any compensation from Nissan that was not disclosed.”
Late last month, he was rearrested on the allegations that he had improperly transferred investment losses to Nissan, and his detention was extended.
Mr. Otsuru said at a news conference that Nissan’s own board minutes showed the company had agreed that Nissan would temporarily provide collateral for Mr. Ghosn when he incurred deep paper losses on foreign exchange investments after the financial crisis of 2008.
The board minutes have not been publicly released.
Mr. Otsuru said that Nissan had entered into an agreement with Mr. Ghosn and a bank that had lent Mr. Ghosn money, but that the agreements were explicitly designed to shield Nissan itself from any losses. “At the time of the transfer being made to Nissan, it was made clear that any losses would be borne by Mr. Ghosn,” Mr. Otsuru said.
The most recent arrest also focused on allegations that Mr. Ghosn improperly used Nissan funds to pay a Saudi businessman to provide collateral for Mr. Ghosn’s investment losses. In his court statement, Mr. Ghosn said that Nissan paid the businessman, Khaled Juffali, for “critical services that substantially benefited Nissan.”
Mr. Otsuru told reporters that the businessman, who he declined to name at the news conference, had provided 3 billion yen (about $31 million at the time) as collateral for Mr. Ghosn in 2009. But he reiterated that Nissan’s payments to the businessman’s company were for legitimate services, such as helping to negotiate disputes with a Saudi distributor or soliciting investments in Nissan.
Nissan said in a statement that it was “not in a position to comment on the content of allegations made by the Tokyo Public Prosecutors Office, or rebuttals of such allegations. The company is complying with requests to aid the discovery process in the ongoing criminal investigation.”
Mr. Otsuru played down speculation, put forward by Mr. Ghosn’s own children, that the auto executive’s arrest and ouster was the result of a revolt by his former Nissan colleagues.
“As a former prosecutor, I am certain that the prosecution would not investigate a case that, for example, would tilt the scales in favor of a particular side in a Nissan power struggle,” Mr. Otsuru said.
He added that Mr. Ghosn had not been asked to sign a confession in Japanese that he did not understand, contradicting an assertion made by Anthony Ghosn, Mr. Ghosn’s son, in an interview with the French newspaper Journal du Dimanche over the weekend. “Not once has Mr. Ghosn expressed concerns about being asked to sign anything that he doesn’t understand,” Mr. Otsuru said.
Anthony Ghosn declined to comment, according to Devon Spurgeon, a spokeswoman for the family.
Since he was arrested coming off his corporate jet on Nov. 19, Mr. Ghosn has been kept in a small cell in Tokyo, where he is not allowed to speak with members of his family and is limited to talking with diplomats and his Japanese lawyers. His attorneys cannot be present when he is questioned by prosecutors.
Mr. Otsuru said he met with Mr. Ghosn for about two and a half hours every day. “He is a very logical person,” Mr. Otsuru said. “He wants to use this time as effectively as possible. He doesn’t speak with us about whether his room is small or his bed is uncomfortable. He wants to use this time with his lawyers effectively for the purpose of the investigation.”