Carlos Ghosn may deny that he is fleeing justice but there is no doubt that he has fled Japan. Until this week he was on bail in Japan facing four counts of financial wrongdoing, but late on December 30th 2019 the deposed motor industry boss announced in a statement that he had taken refuge in Lebanon.
“I am now in Lebanon and will no longer be held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant, and basic human rights are denied, in flagrant disregard of Japan’s legal obligations under international law and treaties it is bound to uphold,” he said in a statement. But the former Renault boss insisted he was not avoiding the Japanese justice system itself. “I have not fled justice - I have escaped injustice and political persecution. I can now finally communicate freely with the media, and look forward to starting next week,” he said.
Enlargement : Illustration 1
The statement confirmed the sketchy details that had begun emerging through the night about the latest extraordinary development in the saga. The Lebanese newspaper Al-Joumhouriya, the first to announce the news, said that the former boss of the Renault-Nissan-Mitsubishi alliance arrived in Beirut on Monday December 30th in an aeroplane from Turkey. A Lebanese source told the news agency AFP that the circumstances of Ghosn's departure from Japan and arrival in Lebanon – where his parents were born and where he spent much of his childhood - were unclear.
The Japanese public broadcaster NHK, citing an unidentified Lebanese security source, said a man resembling Carlos Ghosn and travelling under another name arrived at the international airport in Beirut aboard a private jet.
Under his bail conditions the former motor industry boss had to reside at his address in Tokyo but was free to travel within the country, even though the length of time he could spend away from his home was restricted. The news agency Reuters stated that according to Japan's Justice Ministry that country has no extradition treaty with Lebanon which made it “unlikely” that 65-year-old Ghosn, who holds French, Brazilian and Lebanese citizenship, would be forced by the Lebanese authorities to return to Tokyo to face trial.
This development marks a new chapter in the story of the fall of a man who, just over a year ago, was still president of the world's biggest car-making alliance, Renault-Nissan-Mitsubishi. First of all there was the footage of his arrest on November 19th 2018, captured by the Japanese daily newspaper Asahi Shimbun who had been tipped off about the car boss's detention by six men dressed in black and wearing glove who rushed aboard Gulfstream jet N155AN – pronounced “Nissan” - just after it had landed at Haneda airport near Tokyo.
Then came his first 'escape' – this one legal – when on March 6th 2019 a court in Tokyo freed him on bail of a billion yen (around 8 million euros). Ghosn left Kosuge prison, where he had been held, dressed in workman's overalls with a blue hat and sporting a white anti-polluting mask in a vain bid to disguise his identity.
Ghosn's Japanese lawyers were not happy about Monday's dramatic flight to Lebanon. Lawyer Junichiro Hironaka said he was “surprised” and “dumbfounded” by his client’s arrival in Lebanon, and said he had not been contacted by his client, insisting he had learnt the news “from the television”.
One of the other bail conditions of the former car boss, who was expected to stand trial in 2020, was that his passports were guarded by his own lawyers. Junichiro Hironaka told reporters in Tokyo on Tuesday that Mr Ghosn's legal team was still in possession of those three passports – Lebanese, French and Brazilian – and that his client could not have used them to gain entry to Lebanon. The lawyer added that Ghosn's behaviour had been “inexcusable”.
During a preliminary hearing in Tokyo last October, the same lawyer had called for the proceedings against his client to be dropped, accusing prosecutors there of being in cahoots with Nissan to bring Ghosn down. The charges had been “politically motivated from the start, fundamentally biased”, the lawyer and his colleagues had argued.
In the days following his arrest in November 2018, Ghosn's public relations team had suggested to French journalists that the car industry boss has been the victim of a resurgence of Japanese nationalism. According to this theory, the country could no longer stomach having the French state involved in the Japanese economy via its 15% stake in Renault.
Since his surprise arrival in Lebanon, Ghosn's French lawyers have been told not to say anything ahead of the official counter-attack that the former Renault boss is planning to launch next week. Mediapart understands that once again Ghosn will claim that it was the ultra-nationalism of several key players in the case that led to his downfall. However, while awaiting the factual basis for such claims next week, this argument needs to be put into perspective.
Since the start of the 2010s some Nissan bosses had begun calling into question Carlos Ghosn's “management style”. They were looking to replace him, and this challenge came not just from Japanese executives keen to protect their own turf but from Nissan's finance director, Joe Peter, who is American.
In 2011 people close to Ghosn learnt that Joe Peter had “really badmouthed Renault and the governance around CG [editor's note, Carlos Ghosn]”. During a meeting in Detroit with a well-known financial analyst Joe Peter is even said to have confessed that he was “terribly surprised and disappointed” by Ghosn's management style and considered that “it [could not] continue like that”.
Meanwhile after his arrest, his lawyers, family and Ghosn himself had on several occasions criticised the circumstances of his detention – Carlos Ghosn spent 130 days in custody between November 2018 and April 2019 including both his remand in custody and being held for questioning – and the way that the Japanese legal authorities were conducting proceedings.
During her husband's detention Carole Ghosn wrote a nine-page letter to the Japanese representative of a non-governmental organisation. “I urge Human Rights Watch to highlight his case... to press the government to reform its draconian system of pre-trial detention and interrogation,” she wrote. More recently, his children called for a “fair” trial for their father in an article published on the website of French public broadcaster France Info.
Yet the way the Japanese proceedings have been conducted is nothing new. In his 1960 film 'The Bad Sleep Well' the celebrated Japanese film director Akira Kurosawa depicts a world of corruption in high finance, in which a company executive finally leaves prison after 20 days of detention, completely exhausted. He has barely left the prison when the police arrive to take him into custody again. Faced with the prospect of a further spell in detention, and unable to denounce his accomplices – who were his bosses – the executive gives the police officers the slip and kills himself by jumping under the wheels of a passing vehicle.
In January 2019 Carlos Ghosn spoke to the French business paper Les Échos and the news agency AFP in the visiting room at Kosuge jail and highlighted what he saw as the injustice of the Japanese justice system. He said that the decision to refuse him bail “would not be normal in any other democracy” and asked: “How can I defend myself?” Ghosn, who in that same interview said he was talking about basic “fairness”, was not however overly concerned about respecting employment law in 2011 over the so-called “fake spy” case in which three senior Renault executives were sacked over allegations that they had been involved in industrial espionage, claims that proved completely unfounded. At the time Carlos Ghosn had done the rounds of the television studios speaking about his “certainties” in the case and insisting that there was “multiple” evidence against those who had been accused.
'Mr Ghosn took part in a scheme to conceal from public disclosure more than $90m in compensation'
Carlos Ghosn has been keen to attack what he sees as a political and industrial Japanese plot against him, and the Japanese justice system. But he has said very little about the claims that have been laid against him. He faces four charges: two in relation to deferred income that was not declared to the stock exchange authorities by Nissan, which also faces proceedings, and two others of aggravated breach of trust.
The Special Investigation Division – Tokusobu – of the Tokyo prosecution authority which deals with white collar crime claims that Ghosn “conspired to minimise his remuneration” between 2011 and 2018. He is said to have minimised the remuneration he received in the financial report that Nissan makes each year to Japan's stock exchange. Carlos Ghosn was declaring 4.9 billion yen a year (38 million euros) in income when in fact, thanks to a deferred payment system, he was earning double that. This followed new rules in Japan which, from 2011, obliged companies to declare publicly all the income that its executives received - in salary, stock options and other bonuses – above 100 million yen or 819,000 euros a year.
When questioned by officers from Tokusobu Ghosn denied that he had been involved in any misappropriation. He said he had “never intended to break the law”, that the sums in question were due to be paid to him after he retired and that, of course, it was all going to be declared in due course. “I'm accused of not having declared income that I have never received! There is not one yen that I have received that was not reported,” he said in his January 2019 interview at the Kosuge prison.
Japanese prosecutors also accuse Ghosn of having transferred his personal losses into Nissan's own accounts. During the 2008 financial crisis Carlos Ghosn saw 14.8 million euros worth of investments handled by his wealth manager wiped out. To make up for this a Saudi billionaire lent him the money. According to Japanese prosecutors, this sum was later paid back to the billionaire in a 14.7 million dollar payment via a Nissan subsidiary in the Middle East.
Both Carlos Ghosn and the Saudi billionaire deny this claim. They insist that the payment via the Nissan subsidiary related to payments for lobbying and to resolving a dispute with a distributor in the region. “Everyone knows that he helped us a lot in the region and in Saudi Arabia at the time,” Ghosn said in the prison interview. “To dare to say now that he didn't do anything is unbelievable. Moreover, the payments made to him were signed off by four Nissan executives.”
In this aspect of the case the former car boss should not in theory face any proceedings. Under Japanese company law there is a seven-year statute of limitations on past alleged offences. But the detectives from the Tokusobu unit say that this law does not apply in this case because of the length of time Carlos Ghosn has spent abroad in the last ten years.
Finally, Carlos Ghosn is suspected of having misappropriated for his own use 5 million dollars paid to the exclusive Nissan and Renault concession in Oman via a budget called the “CEO's reserve”. The misappropriated money is said to have passed via a company of which Carole Ghosn was a director and is said to have been used, among other things, for the purchase of a luxury yacht used by the Ghosn family and for the financing of a company run by Carlos Ghosn's son in the United States.
In an interview from prison with the Japanese financial daily The Nikkei on January 30th, 2019, Carlos Ghosn explained that this reserve was not a hidden system and that the payments were countersigned by company executives. “We formally deny any misappropriation in Oman,” Carlos Ghosn's French lawyer Jean-Yves Le Borgne told the media.
More worrying still for the defence of the former high-profile car firm boss – who at his peak was in charge of 400,000 staff globally – is that the supposedly Japanese plot has spread around the world.
At the end of September it was revealed that the US Securities and Exchange Commission, America's stock exchange watchdog, had completed the investigation it had opened at the end of January 2019. On the basis of the Japanese investigation, the SEC judged that Nissan, Carlos Ghosn and an accomplice had indeed hidden from investors some 140 million dollars (around 127 million euros) of income - that had not yet been received – to the CEO.
The SEC stated: “Beginning with fiscal year 2009 following the disclosure rules change, and continuing until his arrest by Japanese authorities in 2018, Ghosn, with the assistance of his Nissan subordinates, executed a scheme whereby more than 50% of Ghosn’s compensation would be postponed and not reported in the annual report Nissan filed with the JFSA [editor's note, Japan’s Financial Services Agency] and published in English on its website.”
It added: “Beginning in fiscal year 2009 and continuing until fiscal year 2018, Ghosn, with substantial assistance from his Nissan subordinates, took part in a scheme to conceal from public disclosure more than $90 million in compensation to be paid to Ghosn … In addition to the more than $90 million in undisclosed and unpaid compensation, Ghosn and his subordinates knowingly or recklessly made, or caused to be made, false and misleading statements regarding more than $50 million of additional pension benefits for Ghosn.”
Ghosn later paid a fine of 1 million dollars to the SEC to put an end to any legal proceedings in the United States, without admitting or denying liability.
There is also the European aspect of the affair. Renault, together with Nissan, appointed the accountancy firm Mazars to go through the accounts of Renault Nissan BV (RNBV for short), the body which oversees the car-making alliance with Nissan and Mitsibushi. The press carried rumours of suspected misappropriated funds that were unearthed. The Japanese daily Mainichi Shinbun claimed that Carlos Ghosn may have kept for himself up to a third of the payments that were due to go to members of RNBV's board of directors. This amounted to 1 billion yen or 7.5 million euros. Meanwhile L'Obs weekly news magazine reported in France that between 2015 and 2017 RNBV spent 1.7 million euros on trips made by Carlos Ghosn, his wife Carole and close family to the film festival at Cannes.
A preliminary investigation launched by prosecutors at Nanterre, west of France, looked into birthday celebrations hosted at Versailles château. A bill of more than 600,000 euros was settled by RNBV for Carlos Ghosn's birthday party, though in its audit Mazars considered it to be a private event.
“People need to calm down, imaginations are bubbling over. The letter of invitation clearly states that it was to do with fifteen years of the Alliance [editor's note, of the car firms],” said Ghosn's French lawyer Jean-Yves Le Borgne. He said it was “not unusual to have some personal guests at this type of evening”.
L'Express news magazine later revealed that the Mazars report estimated that the total amount spent unjustifiably by RNBV in favour of Carlos Ghosn totalled 12 million euros. Following this revelation lawyer Jean-Yves Le Borgne indignantly informed Le Journal du Dimanche newspaper that the accountancy firm had not taken the trouble to question Carlos Ghosn over the expenditure that he was being rebuked over. “They don't seem very concerned about understanding this supposedly unjustified expenditure that is attributed to the president of the Alliance without further explanation. Perhaps all they had to do was to have sent him the report and get his reaction … The finger has been pointed at the guilty person, his defence hasn't been heard, but so what?” said the aggrieved lawyer.
Finally, on April 3rd 2019 Renault's board of directors published a potentially damaging press release. It stated that “certain expenses incurred by the former Chairman and Chief Executive Officer are a source of concern, as they involve questionable and concealed practices and violations of the Group's ethical principles, particularly concerning relationships with third parties, management of conflicts of interest, and protection of corporate assets.” However Ghosn, now in Lebanon after leaving Japan, benefits from a presumption of innocence in relation to all the charges made against him.
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- The French version of this article can be found here.
English version by Michael Streeter