By Chieko Tsuneoka
TOKYO -- Carlos Ghosn's defense team challenged Japanese prosecutors to explain why they didn't charge Nissan Motor Co. Chief Executive Hiroto Saikawa over allegations that the auto maker failed to report Mr. Ghosn's compensation properly.
The confrontation took place at Tokyo District Court on Monday during a pretrial hearing. Mr. Ghosn, who was released on bail April 25 and is living in Tokyo, attended the hearing in a suit and tie.
Prosecutors have alleged that Mr. Ghosn, Nissan's former chairman, caused the company to underreport his compensation on eight years of company financial statements by a total of more than $80 million. The charges involve plans for postretirement compensation that prosecutors say was fixed in each of the eight years and should have been reported each year. Nissan as a company was also charged.
Mr. Ghosn has maintained his innocence, and has said he had hypothetical discussions about postretirement compensation with other Nissan executives. Because nothing was decided, Nissan had no obligation to mention the subject in its financial statements, he says.
At Monday's hearing, Mr. Ghosn's defense team called on prosecutors to say why, if the financial statements were illegal, they didn't also charge Mr. Saikawa, who has been Nissan's chief executive since April 2017.
Mr. Ghosn's defense lawyer, Junichiro Hironaka, said he raised the subject in several ways but prosecutors declined to answer each time.
"Mr. Ghosn was fed up," said the defense lawyer. "The way the prosecutors are addressing the issue of Mr. Saikawa -- can they really answer like that?"
Mr. Saikawa declined to comment. He has said Mr. Ghosn was too powerful and didn't adequately disclose to Nissan's board what he was doing.
A report by Nissan independent directors and outside advisers released in March said Mr. Saikawa signed some documents related to Mr. Ghosn's postretirement compensation. Some Nissan shareholders have called for Mr. Saikawa's ouster, saying that as CEO he should have prevented what Nissan has described as Mr. Ghosn's abuses.
The subject of Mr. Saikawa's future is likely to come up at Nissan's annual shareholder meeting on Tuesday. Shareholders are set to vote on the company's slate for Nissan's board, which includes Mr. Saikawa. He is expected to win thanks to support from Nissan's top shareholder, Renault SA, but the vote tally will give an indication of how deep the resistance to Mr. Saikawa runs among rank-and-file Nissan shareholders.
Mr. Saikawa said he is taking the lead in carrying out corporate governance changes to be approved at the meeting, which he says will prevent the problems he attributes to Mr. Ghosn.
--Sean McLain contributed to this article.
Write to Chieko Tsuneoka at chieko.Tsuneoka@dowjones.com