A Tokyo court on Thursday unexpectedly decided not to extend the detention of Nissan's ousted chairman, Carlos Ghosn, meaning he may soon be released from jail where he has been confined since his arrest for alleged financial misconduct.
The Tokyo District Court said it also decided against extending detention for Greg Kelly, a former Nissan executive who was first arrested along with Ghosn on November 19. Lawyers for both men were not immediately available for comment.
It was unclear whether prosecutors will appeal the decision. Shin Kukimoto, deputy prosecutor at the Tokyo District Public Prosecutors Office, said only that his office will respond "appropriately".
Ghosn has been indicted for allegedly understating his income over a five-year period from 2010. He was re-arrested on Dec. 10 for the same alleged crime covering the past three years. The 10-day detention period in the second instance ran out on Thursday.
The court had widely been expected to extend the detention, as granting bail to suspects who insist on their innocence is highly unusual in Japan.
Masashi Akita, a defence lawyer in Osaka, said the court's decision could reflect a change in its attitude towards detention.
"They are very nervous about criticism of their lenient approach toward detention. This is a typical case of such changing, I suppose," he said. "I think this case has a big impact and effect on the Japanese justice practice, and such a move is favorable for the defense side."
Public broadcaster NHK said Ghosn could be released on Thursday or Friday if any appeal by prosecutors is rejected by the court and bail is granted.
Ghosn's arrest marked a dramatic fall for a leader once hailed for rescuing Nissan from the brink of bankruptcy.
He has been treated like others in detention, held in a small room. Authorities have limited his opportunities to shower and shave, a person familiar with the matter previously told Reuters.
It was not immediately clear how much bail would be, meaning it was still uncertain whether Ghosn's release was possible.
Activist fund manager Yoshiaki Murakami, arrested in 2006 for insider trading, paid an initial 500 million yen ($4.47 million) in bail.
Ghosn's Nissan income is at the centre of allegations by Tokyo prosecutors, who have charged the executive for failing to disclose compensation that he had arranged to receive later.
Nissan has said its whistleblower investigation also uncovered personal use of company funds and other misconduct.
The scandal has shaken the Renault-Nissan-Mitsubishi alliance, with Nissan Chief Executive Hiroto Saikawa calling for changes to weaken Renault control.
Renault has so far not replaced Ghosn as head of the French carmaker, saying Ghosn's compensation had been in compliance with law and governance guidelines.
Documents seen by Reuters showed that executives at both Nissan and Renault were involved in discussions about compensating Ghosn out of the public eye.
A Nissan spokesman declined to comment on the court's decision, saying he could only speak about the company's investigations or executive misconduct.