Japanese Prosecutors Bring New Charge Against Carlos Ghosn - The New York Times

TOKYO — Japanese prosecutors on Monday formally charged Carlos Ghosn, the former head of the Nissan-Renault auto alliance, with breach of trust, piling a new count of financial impropriety onto his existing charges in a move that adds pressure on him and ensures he remains jailed.

Mr. Ghosn, who continues to maintain his innocence, has been in a detention center on the outskirts of Tokyo since April 4, when prosecutors swarmed into his apartment in an early morning raid. They seized evidence and dragged him off to jail — his fourth arrest in the case so far — before attempting to take his wife in for questioning.

He was initially arrested in November on suspicion of hiding the true amount of his executive compensation and spent over 100 days in detention, racking up two additional arrests. Including Monday’s charge, prosecutors ultimately indicted him on four charges of financial wrongdoing, including temporarily shifting his personal financial losses onto Nissan’s books.

He was released in early March after paying $9 million in bail and agreeing to strict limits on his activities that put him under virtual house arrest.

But prosecutors soon revealed that the original charges were just a prelude to more serious allegations: After the April raid, prosecutors said they were investigating Mr. Ghosn over allegations that he used a Nissan subsidiary to redirect $5 million to himself.

Prosecutors have not revealed the details of the allegations, but an internal investigation by Nissan found that Mr. Ghosn had authorized over $30 million in payments to a business partner in Oman, according to a person familiar with the report, who spoke on the condition of anonymity because the company has not yet made its full findings public.

Part of that money was sent on to a Lebanese company controlled by Mr. Ghosn, who then passed funds on to companies controlled by his wife, Carole, and his son, according to Japanese news reports. Mrs. Ghosn appeared before a Japanese judge in mid-April to answer questions about the allegations against her husband.

Neither Mr. Ghosn’s wife nor his son has been accused of wrongdoing. Mrs. Ghosn has said her husband is innocent. His representatives have said the payments were for business purposes only.

In a short statement Monday, the Tokyo prosecutor’s office said that it had presented Mr. Ghosn with “an additional charge for violating the Companies Act.”

Nissan on the same day said that it had filed a criminal complaint against Mr. Ghosn in relation to the charges.

“Nissan filed the complaint after determining that payments made by Nissan to an overseas vehicle sales company via a subsidiary were in fact directed by Ghosn for his personal enrichment and were not necessary from a business standpoint,” the company said in a statement.

Since Mr. Ghosn’s most recent arrest, his Japanese legal team has fought to have him released, taking its appeal to the country’s Supreme Court. But judges declined to set him free, won over by the prosecutors’ argument that Mr. Ghosn would be able to tamper with evidence or witnesses if he were released.

Monday was the last day for prosecutors to either release Mr. Ghosn or charge him, following his arrest this month.

His legal team has filed a new bail application, a spokesman for Mr. Ghosn said.

Mr. Ghosn’s treatment by Japan’s legal system has brought global attention to the harsh tactics employed by the country’s prosecutors.

His family and legal team have argued that the multiple arrests are intended to force Mr. Ghosn into confessing to a crime he did not commit.

Japanese prosecutors are notorious for extracting confessions from suspects, sometimes under duress: In 2017, 88 percent of those who went to trial confessed, according to data maintained by Japan’s Supreme Court.

In a video statement after his arrest this month, Mr. Ghosn insisted that he was innocent, saying that the charges against him were the result of a plot concocted by Nissan executives afraid of taking the blame for years of bad financial results at the company.

“My biggest wish,” he said, “is to have a fair trial.”

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https://www.nytimes.com/2019/04/22/business/carlos-ghosn-japan-new-charges.html

2019-04-22 06:53:53Z
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Tesla investigates after car appears to explode in China - CNN

A short video of surveillance footage posted on Chinese social media site Weibo (WB) showed white smoke emerging from what looks like a white Tesla car parked at a lot in Shanghai. After a few seconds, the electric vehicle bursts into flames and the clip ends soon afterward.

The video, which was filmed just after 8.15 p.m. local time on April 21, appears to show a Tesla Model S sedan. It was posted on Chinese social media a couple of hours later and has since been shared widely.

Tesla (TSLA) would not confirm any of the details, other than to say it is investigating the incident alongside Chinese authorities.

"We immediately sent a team on-site and we're supporting local authorities to establish the facts. From what we know now, no one was harmed," a Tesla spokesperson told CNN Business on Monday.

The clip attracted a mix of derision and outrage on Weibo. "Us car owners demand an explanation," wrote user Miao Hongyang. "Jeopardizing our safety in a moment's instant and the fact it ignited so quickly is something we will not tolerate."

Another Weibo user registered under the name Your Dad, added: "One thing I've learned from this incident: from now on, don't ever park next to a Tesla."

China is huge for Tesla

This isn't the first time one of Tesla's cars has appeared to burst into flames, but previous incidents often involved moving vehicles or vehicles that had crashed.

"It seems strange that the battery, not charging, would combust on its own," said Tu Le, founder of consultant firm Sino Auto Insights.

Tesla has previously said that gasoline-powered cars are 10 times more likely to catch fire than those powered by electric batteries.

China is a hugely important market for Tesla. The country accounts for about 20% of the company's annual revenues, or more than $2 billion in sales. But its share of this market is still tiny.

The company wants to supercharge sales in China with a new factory in Shanghai. Tesla eventually hopes to produce 500,000 cars at the facility every year.

But Tesla is also grappling with a slowdown in the Chinese economy, which has already hit foreign brands including GM (GM) and Ford (F). Import tariffs resulting from the trade war with the United States have seen Tesla prices in China fluctuate wildly.

It also has to contend with heavy competition from Chinese players, such as BYD (BYDDF) and NIO (NIO).

Don Giolzetti contributed to this report.

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https://www.cnn.com/2019/04/22/business/tesla-explosion-china/index.html

2019-04-22 07:23:00Z
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Stop & Shop says strike is over - WPRI 12 Eyewitness News

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1. Stop & Shop says strike is over  WPRI 12 Eyewitness News
2. Stop & Shop, union workers resume negotiations in effort to end strike  Fox Business
3. Stop & Shop strike convinces 75% of loyal customers to take business elsewhere  Boing Boing
4. Stop & Shop Workers’ Strike Over, Tentative Agreements Reached  CBS Boston
5. Rumbleseat restaurant owner gives food to Stop & Shop workers on strike  WESTERNMASSNEWS.com
6. View full coverage on Google News

https://www.wpri.com/news/local-news/stop-shop-says-strike-is-over/1943668516

2019-04-21 23:22:00Z
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13 American Airlines passengers hospitalized after flight to Boston - Fox News

Members from a student group flying to Boston from Miami reportedly fell ill during the flight. (iStock)

A group of passengers were taken to the hospital after an American Airlines flight landed at Boston Logan International Airport Sunday morning.

Members from a student group flying to Boston from Miami reportedly fell ill during the flight, a spokesperson for American Airlines confirmed to Fox News.

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Boston EMS responded to the airport with multiple units after receiving a call. According to Twitter, 13 passengers were transported to the hospital.

The flight landed safely and no other passengers or crew members reported feeling ill.

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Those taken to the hospital exhibited “symptoms that were minor in nature,” Boston EMS wrote in the tweet.

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https://www.foxnews.com/travel/american-airlines-passengers-hospitalized-boston

2019-04-21 18:16:59Z
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Why Stock Market Investors Should Be Extremely Cautious For The Remainder Of 2019 - Seeking Alpha

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Why Stock Market Investors Should Be Extremely Cautious For The Remainder Of 2019  Seeking Alpha

Equity market volatility has been unusually low over the past few years. And investors have been lulled into a sense of complacency that what goes up will conti.

https://seekingalpha.com/article/4255574-stock-market-investors-extremely-cautious-remainder-2019

2019-04-21 16:41:00Z
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Strong stock and bond markets at odds over global growth - Reuters

NEW YORK (Reuters) - It looks like something has to give in global markets.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2019. REUTERS/Brendan McDermid

Stocks and bonds around the world have rallied atypically together since the start of the year, rewarding investors both bullish and bearish on the direction of global growth.

The main catalyst for the gains was the Federal Reserve’s surprise decision in early January to pause its tightening policy, after four interest rate increases in 2018 raised fears it was being too aggressive as the economy cooled and inflation remained minimal. Those fears helped send global markets into a tailspin in December.

Yet with the U.S. benchmark S&P 500 near a record level and corporate junk bonds notching new highs, the question stock and bond investors are asking is whether the Fed’s next move will be a rate cut that further propels risk assets or a rate hike that cuts into the stock market’s momentum.

A move by the Fed on interest rates or a communication misstep by the central bank would likely end either the rally in the stock market or in investment-grade bonds by the end of the year, restoring the traditional give-and-take between risk and safety, investors say.

“The Fed is between a rock and a hard place,” said Kathleen Gaffney, a portfolio manager at Eaton Vance Management in Boston. “They can’t go lower because there are signs that inflation is rising and they can’t go higher because of global political uncertainty. It leaves the market on pause.”

The U.S. central bank has said it will soon stop letting bonds bought during its “quantitative easing” period following the financial crisis roll off its balance sheet, which also helped push yields on safe havens like Treasuries lower and acted as a tailwind for riskier assets.

Gaffney said the Fed will likely have to raise rates again because of rising wages and other forms of inflation by the end of the year, adding that such a move will “pierce” the high valuations in both the stocks and bond markets.

TWIN RALLY

The rolling four-month percentage change in the price of the S&P 500 and the 10-Year Treasury note have both been positive for three straight months, according to a Reuters analysis. That is the longest such streak since a five-month run that ended in August 2017, it showed.

In that same 2017 period, the S&P 500 gained and 10-year Treasury yields fell as the market digested conflicting economic reports during the first year of the Trump administration, before the Federal Reserve in September began quantitative tightening that resulted in bond yields rising as the S&P 500 continued to rally.

Since January equity markets around the world have made up much of the ground they lost during a wrenching fourth quarter of 2018 that sent the U.S. stock market to the brink of a bear market.

The S&P 500 and Europe’s STOXX 600 are up almost 16% year to date, while stock indexes in China are up nearly 30%.

The ICE Merrill Lynch U.S. high yield index is up 8.6% year to date while the Merrill Lynch World sovereign bond index is up almost 1.5%.

World stocks vs bonds - tmsnrt.rs/2IrqXeF

A rally in benchmark 10-year Treasury notes, usually seen as a safe haven, undercuts the picture of a “risk on” market. Their yields have slid from 2.69% at the start of the year to as low as 2.34% in late March.

“At this point in the cycle, equity investors are trying to take any incremental news positively while fixed income investors are not,” said Jen Robertson, a portfolio manager at Wells Fargo Asset Management in London. “It’s quite delicate at the moment and any negative news out of first quarter earnings could impact this sharp bounce.”

Further uncertainty due to the economic impact of the UK leaving the European Union, which has now been pushed back to Oct. 31, or a deterioration in U.S.-China trade talks could be a “shock to the system” and derail both stocks and bonds, she said.

The spread between U.S. three-month bills and 10-year notes turned negative for the first time since 2007 in March, a bearish sign as a yield curve inversion has signaled an upcoming economic recession in the past.

The move initially boosted stock prices as investors predicted it would hem the Fed in from future interest rate hikes. But equities could fall soon if recession fears continue to grow, said Hiroaki Hayashi, managing director of Fukoku Capital Management in Tokyo.

“If you look at the past experiences, share prices have often rallied six to nine months after the yield curve initially inverted before entering a major correction. I believe we are exactly at such a phase now.”

Despite outsized gains this year, financial markets have not indicated investors have faith that the global economy can grow without historically low interest rates a decade after the end of the Great Recession, said Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle Investments.

“The bull market we’ve had for the past 10 years is essentially because of really low interest rates,” Bahuguna said.

“I don’t think that equilibrium will last much longer,” she added, saying rising inflation and low unemployment could soon test global markets’ ability to cope with tighter monetary policy.

Additional reporting by Hideyuki Sano in Tokyo and Terence Gabriel in New York.; Editing by Alden Bentley and Tom Brown

Our Standards:The Thomson Reuters Trust Principles.

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https://www.reuters.com/article/us-usa-funds-globalrally-analysis/strong-stock-and-bond-markets-at-odds-over-global-growth-idUSKCN1RX0DS

2019-04-21 13:10:00Z
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A Tale of Two Teslas: Elon Musk to Tout Robot Cars Amid Sales Slump - The Wall Street Journal

Tesla has warned it would report a loss instead of a previously expected profit in the first quarter. Photo: Zheng Huansong/Zuma Press

By

Tim Higgins

Tim Higgins
The Wall Street Journal
• Biography
• @timkhiggins
• tim.higgins@wsj.com

April 21, 2019 8:00 a.m. ET

As Tesla Inc. TSLA 0.75% faces questions about whether demand for the Model 3 compact car is slowing, Chief Executive Elon Musk wants investors to focus on the auto maker’s road much farther ahead: vehicles driving themselves in a robot-taxi fleet.

Mr. Musk is gathering investors Monday to reveal the electric-car maker’s latest efforts to develop self-driving car technology and his strategy for deploying it. The presentation at its Palo Alto, Calif., headquarters is scheduled two days before Tesla reports quarterly financial results, which are expected to show a loss on slumping vehicle sales.

The week’s twin billing encapsulates the polarizing nature of Tesla, which has sharply divided investors between skeptics and believers. Monday’s event will likely showcase Mr. Musk as the exuberant salesman pitching his futuristic vision for Tesla. First-quarter results, on the other hand, are backward looking by definition and could prompt a defense of operational struggles.

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How do you think Tesla’s ambitions to build a self-driving taxi service will play out over the coming years? Join the conversation below.

Some investors praised Tesla’s decision to highlight its driverless-car technology because they think it is a reason to value Tesla more highly than other auto makers. Those betting against the company said the investor day is a marketing stunt ahead of anticipated bad news.

“I’ve seen this movie before,” said David Kudla, CEO of Mainstay Capital Management, a short seller of Tesla stock. “Whether it’s launching the Tesla into space, whether it’s some sort of product reveal or some grand announcement that comes a day or two before earnings.”

Tesla declined to comment.

The investor presentation and earnings report come after Friday’s disclosure that Tesla is planning to shrink its board to seven from 11 directors as part of a series of moves designed to improve its corporate governance.

Since Tesla unveiled the Model 3 in March 2016 and received an unexpected deluge of $1,000 deposits for a car aimed at a more mainstream buyer, the company has sought to show it has the manufacturing muscle to meet customer demand.

After overcoming some production challenges for the model, Tesla now faces questions about whether it has reached a limit on buyers of a car that on average sold for $57,000 last year, according to analyst estimates.

Tesla has already warned it would report a loss instead of a previously expected profit in the first quarter and said vehicle deliveries plummeted 31% from three months earlier, citing challenges in delivering the Model 3 overseas for the first time. The company brought the car’s price down to the long-promised $35,000 after the phaseout of U.S. tax credits for buyers of electric cars.

Unlike major auto makers, Tesla doesn’t disclose how many cars and sport-utility vehicles it sells. LMC Automotive, a vehicle-forecasting firm, estimates that Tesla’s U.S. vehicle deliveries fell 57% to 31,900 from the fourth quarter and that the company will sell 13% fewer vehicles in the U.S. this year compared with 2018.

“You’re probably leveling into a more natural area of the inevitable supply-and-demand balance,” said Jeff Schuster, an industry analyst with LMC Automotive.

Mr. Musk has said he believes there is an annual demand for 500,000 Model 3s even as Americans prefer SUVs over sedans. “The demand for Model 3 is insanely high,” Mr. Musk told investors last quarter before the most recent price cuts. “The inhibitor is affordability…It’s got nothing to do with desire.”

At Monday’s driverless-car presentation—slated to be live streamed and to include test rides for investors—Mr. Musk may try to stoke demand by showing off Tesla’s technological prowess while touting his ultimate promise: fleets of robot taxis.

Tesla investor ARK Investment believes a successful robot-taxi fleet could boost the company’s stock to $4,000 a share in 2023. On Friday, Tesla’s shares closed at $273.26, down 18% for the year.

When Tesla announced April 11 that it was offering 36-month lease financing for the Model 3, the company said customers wouldn’t be able to purchase the vehicles at the end of the term because the cars would be deployed in a robot fleet. Car companies normally allow a customer to buy the car or sell it used.

Mr. Musk said the price of the so-called full self-driving feature on Tesla vehicles will increase “substantially over time” beginning on May 1.

More on Tesla

• Tesla to Cut Down on Board Members
• Tesla Halts Online Sales of $35,000 Model 3 (April 12)
• Elon Musk Unveils Model Y SUV in Next Big Wager (March 15)
• Tesla’s Model 3 Loses Recommended Status From Consumer Reports (Feb. 21)
• Tesla Is Cranking Out Model 3s—Now It Has to Service Them (Feb. 10)

He expects the fully self-driving system to be “feature complete” this year, meaning the vehicle will have the ability to drive to a destination without user intervention but will still require observation. The technology is improving so rapidly that it could be safe for a person in the driver’s seat to sleep in a moving vehicle by the end of 2020, Mr. Musk has said. But he has also cautioned that much depends on regulatory approval, although it is unclear what approvals are necessary.

Legislation aiming to establish nationwide regulations has stalled in Congress, leaving states to create their own rules.

Tesla vehicles currently don’t have the ability to drive themselves. Its driver-assistance system, Autopilot, requires the driver to remain in control and monitors for hand movement on the steering wheel. Mr. Musk has argued the system has improved safety, though Tesla has drawn scrutiny for its aggressive marketing and several crashes involving the system.

During an interview on YouTube with a Massachusetts Institute of Technology researcher earlier this month, Mr. Musk said he expects vehicles with fully autonomous capabilities to have a value five to 10 times greater than that of other cars during the next decade.

“Buying a car today is an investment in the future,” Mr. Musk said in the video. “If you buy a Tesla today, I believe, you’re buying an appreciating asset, not a depreciating asset.”

Write to Tim Higgins at Tim.Higgins@WSJ.com

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https://www.wsj.com/articles/a-tale-of-two-teslas-elon-musk-to-tout-robot-cars-amid-sales-slump-11555848000

2019-04-21 12:00:00Z
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