Former Nissan Motor Co. Representative Director Greg Kelly is set to be released after more than a month in detention. This comes after a Tokyo court rejected the prosecutors' request to hold the American executive.

The Tokyo District Court ruled that Kelly be freed, while Carlos Ghosn, the automaker's ousted chairman, remains in custody. Kelly paid 70 million yen ($640,000) bail in cash, the court said.

Kelly was detained along with his former boss on suspicion of understating Ghosn's income in financial statements for several years. Neither Kelly nor Ghosn have been able to defend themselves in public, so Kelly's release could give him the first opportunity to do so.

The arrests have jolted the global car industry and strained Nissan's alliance with French car maker Renault SA. Both Kelly and Ghosn remain on the Japanese car maker's board but without representative rights.

Kelly's wife, Dee Kelly, appealed for his release in a video statement last week, saying her husband had been wrongly accused as part of a power grab by several Nissan executives.

She also added that he and Ghosn fully believe that they did not break the law, citing her husband's need for surgery for spinal stenosis.

A Nissan spokesman said the car maker was not in a position to comment on the latest twist in the more-than-month-long saga.

“The company's own investigation uncovered substantial and convincing evidence of misconduct, resulting in a unanimous board vote to dismiss Ghosn and Kelly as chairman and representative director. Our investigation is ongoing,” the spokesman also said.

On Sunday, the Tokyo court had extended Ghosn's detention for 10 days, following fresh allegations of making Nissan shoulder personal investment losses.

Ghosn was re-arrested on Friday based on suspicions that around October 2008 he shifted personal trades to Nissan to make it responsible for 1.85 billion yen ($16.6 million) in appraisal losses, prosecutors said.

Prosecutors also said Ghosn had inflicted damage on Nissan by having it deposit a total of $14.7 million on four occasions between June 2009 and March 2012 into a related bank account.

That extension of his detention means Ghosn will remain in Tokyo's main detention centre, where he has been confined since his arrest in November, at least until January 1.

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