The article also claims he entered Lebanon on a fake (or at the very least not his own) French passport.
Moving internationally with fraudulent credentials would land most people in jail, but it seems the local government "loves" the man (no doubt his money helps with political favours), so he's safe from that too.
He entered Turkey with a fake passport, maybe the Turkish government issued him a new valid Turkish passport? And I would have to think he already had the OK from the Lebanese government to travel there and stay there without being extradited.
Lebanese TV says he entered Lebanon on a French passport. It sounds like Japan didn't confiscate all of his passports. It's likely he has three...France, Brazil, and Lebanon.
Does France not allow a citizen to hold multiple passports at once? I know the US allows this. Say you travel often, including to places where you need to send your passport to a foreign embassy to get a visa. You can request a second passport so you can continue traveling elsewhere while you wait on your first passport to be returned to you.
Seems like the CEO of multiple major multinational corporations would be the sort of person who would need this.
So maybe when Ghosn was required to hand over his passports, he gladly handed 3 of them over, quietly retaining 1 or more in a safe place.
It is possible in France to have several passeports of there are reasons for that (for instance what you have in one passport forbids you to enter another country, or could put you in danger...)
Ghosn may have had convinced the authorities to deliver him more passports.
The press is certainly painting him as a fairly classic example of a celebrity CEO whose real expertise is looting the companies he runs, rather than turning them around.
On the flip side of that... I quake with terror at the thought of ever being charged with a crime in Japan. Repeated interrogations without the right to have a lawyer present? Delaying charges in order to secure multiple detentions? Harsh conditions of bail?
All of these things seem to be engineered to produce guilty pleas or convictions without a lot of pesky pushback from the accused.
I quite like the rule about evidence without a warrant though.
Its hard to make a solid rule on that one but it does feel off that the truth isn't admissible if malice was used to obtain it. Surely in its perfect abstract that malice is then a separate trial as long as the evidence is genuine.
It does feel off. That’s why lawyers have a saying, “bad facts make bad law.”
That is, people tend to side with what feels right In a given situation rather than what is the best policy for a government to execute over millions of people over centuries.
Something can be a good idea on a one-off basis and a terrible idea when generalising out. Having a fair legal system with strong protections for citizens against the authorities trumps any individual conviction.
The Supreme Court only allows the exclusion of incriminating evidence only when it yields “appreciable deterrence”. In practice, this means that if police obtained a valid warrant (at the time), then the evidence is still admissible even if the warrant was later found to be illegal.
In anyway, it seems like a corrupt or wronged system.
Being a Japanese born and living here, it seems very different in terms of what e-Gov tech practices can do over here than in similar regards in the US like Palantir, etc. Would be great if there was some resources to pave this kind of path, hell, we still use FAX and our IT ministry hasn't used a USB before.
Most criminal defence attorneys will admit that the most of the people they work with are guilty. It’s just how the police and justice system works when you get caught and what cases go forward. But 99% will always be insane and a giant red flashing light indicator of something is wrong.
At least 5-10% of people get off on technical details the police or prosecutors messed up or just good lawyering of guilty people. The rest the cases fall apart before trial because of witnesses or other evidence and turns of events. (I’m pulling these numbers out of my ass just to make a point).
The problems in Japan are with the due process and a serious lack of rights of the accused. Even if we completely ignore the conviction rates.
I’ve read a competing theory of Japan which says prosecutors are so over-worked they only go through with cases they know they’ll win. I wonder how one would decide?
In the UK, the CPS only prosecute cases with “a reasonable chance of conviction”, which I guess means they essentially choose the conviction rate they’re aiming for?
That sounds like the same bullshit line that the FISA courts give their 99%+ approval rating for domestic surveillance warrants.
We saw how that works in practice recently with that FBI report where the judges were basically yes men trusting everything the FBI told them without even basic scrutiny...
The Japanese system is more on the input end regarding due process and rights to counsel.
I think it’s impossible to decide which of two criminal justice systems is “better” knowing only the conviction rate of both. Asking people to do this or placing them in a position where they are likely to is asking them to commit to finding flawed reasoning to support their own biases — and probably has an enhancing effect on those biases.
In general there are hoops to go through before ending in front of a court: Police must gather enough evidence against someone. This means that the police and prosecution services think the someone is likely guilty based on evidence before someone is prosecuted.
It is therefore expected that conviction rates should be relatively high whether in the UK or Japan.
However, 99% really looks like rubber stamping a decision that was already made by the police... and that's a red flag.
That's a bit misleading. Prosecutors drop or misclassify things when they are unlikely to get a conviction. for example, murders can be classified as "accidents" or "suicides", and so forth.
I can see that, but knowing a bit about human nature and how Nissan was a bit salty over the Renault partnership and how they wanted him out I don't think he stood much chance. I dont know if he is guilty or not, but I don't blame him for getting out of there.
They have an imprisonment rate that is 1/15th that of the U.S.A., though, so that could be that they don't prosecute unless they're really certain they will win. U.S. prosecutors go after a lot more people.
99% conviction rate, and 23-day detention without charges. One can imagine the various ways to torture people with no lasting marks in 23 days, including the « cold room » (soaking someone in freezing water in the aircon, which made Michael P Fay accuse himself in Singapore in 1995). The thing that I didn’t know is, it is apparently renewable in Ghosn’s case without charges, then converted to half a year of detention.
> painting him as a fairly classic example of a celebrity CEO whose real expertise is looting the companies he runs
I don't see that. Most press commends him for turning around Nissan and Renault.
He may have gotten greedy. His downfall was more due to social norms. Greed is perceived in a good light in the USA. Greed is a cardinal sin in Japan. (I'm generalizing)
Ghosn probably felt he should have taken the GM job when Obama offered it to him. His counterpart there was easily making more than he was despite all the financial engineering he had to do to get what he viewed as fair compensation
I think it’s a gross oversimplification to say that greed is perceived in a good light in the USA. Financial inequality and the ever-widening gap between CEO pay and worker pay is a contentious subject in the USA as elsewhere.
That being said, nobody does anything about it in the USA for various reasons, and I’ll accept that the USA is certainly one of the easier places in the world to get away with egregious greed.
I employed a fair bit of hyperbole in my previous comment, so take it with a grain of salt.
Japan and France, where Ghosn was CEO of 2 companies, have strict compensation caps for executives. In the USA there is no such thing. The cultural perception of making a lot of money is different in Japan and France vs USA.
That's not strictly true. There is a tax code provision that prohibits companies from counting executive compensation of over $1MM as an operating expense, the intention being to discourage high compensation by essentially putting an additional tax on the excess compensation. It's not very effective, particularly since "performance-based" compensation was exempt until a couple years ago.
There are also harder limits for executive (and other people's) compensation in government contracting. Somewhat more effective than the above, but still not great.
What are the caps on France? The top CEOs are paid several tens of millions of euros. The limits are cultural to some extend, but I do not know of any legal ones (for private companies, the public ones do have legal caps)
It's that old Gordon Gekko trope that everyone takes as gospel here. I don't think Gordon was really a hero in that movie, but I beg to differ with other interpretations.
Japan, CEO gets paid $1 million a year. Engineer makes $60k
USA, CEO gets paid $100 million a year. Engineer makes $300k
I much prefer the higher paid CEO as he's paying me 5x what my Japanese counterpart gets paid.
On top of which in Japan I have to grovel up to my CEO and speak to them like royalty using super groveling language where as the CEO in the USA can call by their first name and treat them as just another person.
Your comment does a lot of mental gymnastics to avoid calling stealing, stealing and a crime, crime.
Americans don’t view greed positively, we are too busy trying to survive a rigged system without falling victim to some financially crippling life event.
At the personal level, I don't think many value greed as a virtue. The only people who do this explicitly to my knowledge are the descendants of Rand's Objectivism, of which our Fed chair of many years, Alan Greenspan, was definitely an adherent. His chairmanship had ushered in a new culture of vulture capital in the 80s and we're only now catching up on how dystopian it all is.
Yeah! That's why Martin Shkrelli was so admired as a national hero in the U.S.
...right?
I can't think of a single place on this planet where greed is admired, unless you want to over-generalize and lump in general capitalism and entrepreneurship -- but I think that the effort to over-define greed into any and all wealth accumulation is missing the actual point behind the concept of greed itself.
Lots of downvotes, but this comment is essentially correct. I have never seen an American business mag lionize an executive for their "greed", for example. Innovation, vision, boldness, etc. etc. It may all be B.S., but it's not saying "this executive, he's so greedy, isn't that great?!"
Greed is not perceived as negatively in the U.S. as in, for example, Japan, but it is not, here or anywhere I am aware of, perceived "in a good light". When you want to suck up to an executive in the U.S., you don't commend them on how "greedy" they are, because (in the U.S. like anywhere else), that's an insult.
I think what you are missing is that "greed" is in the eye of the beholder. Of course a business magazine never worships the "greed" of a great businessperson, but they do worship a person's ability to make huge deals.
America definitely worships actions that many would consider to fall under the "greed" term, even if you don't. A great example is that Donald Trump's main qualification for being President was his wealth and business acumen. I think half the country would consider him a poster child for "greed" while the other half think his actions fit in on a resume.
> celebrity CEO whose real expertise is looting the companies he runs, rather than turning them around
Why can’t it be both?
We have evidence he turned the companies around [1]. And we have evidence he paid personally-affiliated companies money for dubious services [2], a track record that has been probed by multiple countries [3].
Hallelujah. When I see stories like this, I'm always reminded of what a strong, natural human predilection there is to choose sides. But when I look at the reports, the simplest explanation seems to me that both sides are true:
1. Ghosn was a talented CEO who engineered big turnarounds at Renault and Nissan, who also was likely embezzling from the company.
2. The Japanese justice system is fundamentally tilted toward the prosecution, and is especially unfair to powerful foreign individuals.
Ghosn kind of reminds me of this quote: "Great men are almost always bad men."
Personally, I hope this to be a good show to Japanese people. The timing is good too. It is finally dawning on people in Japan that their government might not be entirely fair, and how the extreme rich like him can do shady dealings. Many of them have been too naive.
Not every country follows British common law jurisdiction like USA.
Japan, China and Many countries in Europe including Germany follows continental law. So probably just assuming that lawyers presence will change something substantially is not appropriate.
In those system a prosecutor only brings the case when they are convinced there is enough evidence to prosecute otherwise they themselves be on a hook, unlike common law jurisdiction. The only question here should be is the person given chance to defend himself and I believe in this case Japan did give enough chances so much so that the person moved all his wealth with his wife outside of Japan during trial. Send families to secure destinations with all the wealth.
Now himself absconded to a non extradition country. I hope such punishments are meted our to CEO of Enron, Lehman and many others in USA but didn’t happen.
Carlos knew very well the Japanese system when he agreed to work with Nissan. So all those stories of him being a victim is a pr run by his family and money.
The CEO of Enron, Jeff Skilling, was convicted and sentenced to 24 years in prison. He cut a deal later to get it reduced to 14 years, of which he served 12 before being released on parole.
Not sure what crime you think the CEO of Lehman Bros. committed (is not having enough pull with the Fed and US gov to get a bailout like the other large banks a crime?)
As for the "many others", Martha Stewart went to jail for five months. Bernie Madoff got a 150 year sentence and is still in jail. Timothy Rigas (Adelphia Communications) served over 10 years in prison. Etc, etc.
If Carlos would were in the US, his assets would have been frozen and not permitted to flee.
Another fun tidbit of the Japanese system: they have to release you if they've held you for 23 days, so they give you back your possessions, walk you out the door and then swarm you with police five seconds later to arrest you again for a slightly different crime.
Of course, how many of us mere mortals will be keeping our jobs after no-showing and zero contact for 3 weeks?
Note that's basically what happened to Ghosn after he paid bail the first time. Let's remember this: he had to pay bail to be released to be reincarcerated. After which he paid bail again...
How does someone with multiple organizations shadowing him skip bail?
"The terms of Mr Ghosn’s detention meant he could leave his flat while on bail, but he was followed by three agencies — the police, prosecutors and a private detective."[1]
The escape reads like a Bond movie. An orchestra gave a performance at his house, and when it left, he was hidden in one of the boxes used to carry instruments.
That same box was then flown to Turkey in a private plane, with him in it.
It’s reported that his wife arranged the entire affair.
Well, at this early stage anything could be true, and anything reported could be a cover story fed to compliant journalists, but the escape caper was reported on Lebanese Murr TV.
I really doubt you could pull this off in Japan with bribes: there are way too many parties involved and way too much public scrunity. Sneaking out of the country seems much more plausible.
Sneaking out of an island country while under state surveillance generally requires greasing a few palms. Not necessarily to knowingly co-operate. But to look the other way.
Simply getting through immigration and customs requires (a) gambling you get a distracted agent or (b) paying a bribe. Given the consequences with (a), it's not surprising that pretty much every fugitive-by-air account features bribes.
There are many more steps that are tightly watched in getting on an international flight, even one privately chartered, particularly out of Japan.
Assuming the story[1] is true, that seems plausible to me. At the very least, they found a way for immigration and customs to not open the large "musical instrument box".
To be honest, given the state of the Japanese system[1], if I were in his position, I would escape and skip bail... I have lived in Japan and love the country but I would be really scared if for whatever reason I were to be suspected by the police there.
[1] Japan has very few protection for suspects and more than 99% conviction rate. There's a great movie about the justice system there that is worth seeing: I Just Didn't Do It, それでもボクはやってない
> Japanese prosecutors and the U.S. Securities and Exchange Commission both claim Ghosn and Nissan violated pay-disclosure rules
> within days of his arrest, a billboard with his portrait loomed over the streets leading to downtown Beirut. “We are all Carlos Ghosn,” it read. The executive’s incarceration united the country’s usually fractious politicians around him.
Interesting how different he is viewed by different countries.
1) Concealing the true scale of his retirement package, none of which had been paid
2) During the '08 crisis he had Nissan temporarily take on hedging contracts (used to blunt the impact of currency fluctuations of the yen) since his bank was demanding collateral he didn't have; then later securing a line of credit from a Saudi businessman who was paid $14 million by Nissan (ostensibly for regional distribution)
I'm no forensic accountant but that's not a lot of smoke, much less fire. The retirement package was still theoretical and it's hard to believe a man being paid $20 million a year was really engaging in financial skullduggery for what amounted to peanuts of his net worth.
As others in this thread have pointed out, this seems to be a case of the Japanese looking down on greed, whereas it's the norm in America and some parts of Europe.
Also the Japanese were possibly reluctant to see a big Japanese company (Nissan) subsumed into a large international behemoth (Ghosn was trying to formally merge Renault and Nissan at the time of his arrest).
Ghosn is probably right that he can't get a fair trial in Japan's notoriously prosecutor-friendly justice system. Even the Businessweek article notes the conviction rate is at or near 100%.
Ghosn may have been arrogant and greedy but unless new details are presented the publicly available evidence suggests these charges are extremely flimsy.
How are the GFI payments to SBA the "elephant in the room"?
GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives." At some point later, SBA paid GFI. The Japanese suggest this was a kickback scheme but 1) the fact that one firm paid another and vice versa is not ipso facto evidence of financial wrongdoing 2) if this really is a kickback scheme, why such low sums of money relative to his net worth?
The other accusation in the articles you reference is that GFI made payments to a company named "Shogun Investments", of which Ghosn's son was involved, and that he directed those funds to his own financial startup, "Shogun Enterprises", which then possibly used the funds to buy a yacht.
The first charge has no clear basis for impropriety, and the second is against Ghosn's son, not Ghosn (and btw, even if Ghosn's son did misuse investor funds -- and he denies doing so -- it wouldn't be the first startup in the world to do so).
Unless you can explain to me something I'm missing these accusations do not strike me as "the elephant in the room."
> GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives."
Nissan-Renault paid "overseas distributors" for services allegedly never rendered. Those funds then found their way to GFI, a Ghosn family controlled entity. This is, if true, embezzlement.
It was this finding that caused Ghosn's support at Renault to crater. It's also what prompted the French probes.
> What proof is there these services were never rendered? Neither article you cited claims that
Both articles describe the transfers as misappropriations of funds. These transfers were a revelation not only to Nissan, but also to Renault. They prompted probes in both France and Japan (and likely will, at this point, in the United States), it fits a pattern of embezzlement.
Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
The Japanese criminal-justice system is deeply flawed. But allegations are made in multiple cases across multiple jurisdictions and describe seriously criminal behavior.
Didn't the SBA payments continue after Ghosn left? And folks said these types of payments generally got a lot of levels of approval? A reminder that he has been prohibited from telling his side of the story so far.
A lot of his complaints was that the prosecutors were leaking TONS of info but he was prohibited from replying and that he had no guarantee of a trial date.
This whole compensation thing seemed so weak. The filings disclosed what he was paid, there was no agreement to pay him more. He was keeping track it seemed like of what he felt he should get paid. I'm sure he (and many other CEO's) sometimes calculate how much they believe they should get -> maybe they propose those numbers to the board etc. How is that criminal? He wasn't paid that much if you look at it. There are .bomb scammers getting paid far more.
The other odd thing is the claim that he didn't render services. By all accounts the guy was a workaholic.
For this he's been in jail with no confirmed trial date. Given the supposedly slam dunk nature of the case why don't they go to trial on the compensation FEIL charges?
> Both articles describe the transfers as misappropriations of funds
"Describing as" != prove. And when it comes to throwing people in jail we should strive for prove.
> Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
First, no Nissan funds were in Ghosn's "personal account." Not sure where you're getting that. The articles clearly describe GFI as an arm of Nissan directly controlled by Ghosn but that is not a personal account -- it was still a Nissan account.
Second, Ghosn's defense has been all along that others in the firm approved the transactions. Someone somewhere was clearly signing the checks -- I don't know how true this is but it is a legitimate defense.
Allegations are not proof. I can accuse you of anything -- doesn't make it true.
Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it.
> when it comes to throwing people in jail we should strive for prove
Pre-trial detention is common worldwide. In this case, it was loosened. (Clearly, too much.)
> Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it
It's not proven. That was for the trial to conclude. Criminal efforts in Japan, France and elsewhere will continue.
There is a preponderance of evidence, the legal standard in most jurisdictions, for bringing charges around embezzlement. I agree the compensation charges were weak. But they weren't the bombshell.
In any case, we'll get the facts over the coming years. The Japanese case will continue. And Ghosn fleeing will likely prompt investigations in the United States, at the very least for asset seizure.
That would have been for the judges in the trials in multiple countries to evaluate and either convict or release. Now they won't happen since Ghosn decided to flee to Lebanon rather than stand trial.
Given how conservative Japanese prosecutors are reputed to be in bringing cases in the first place and Ghosn's decision to flee , I'd bet they have reasonable evidence.
Olympus - Accounting fraud - overseas whistleblower was the one prosecuted!
Lots of other cases - Japanese CEO's doing MUCH MUCH worse face zero prison time and/or prosecution.
A lot of folks posturing here. The compensation charges - which would have been the first to go to trial if they'd ever gotten to trial (the prosecutors have been dragging things out) were laughably weak. If this is what puts CEO's in jail for years it's a total scam - 100's of japanese CEO's do this and much more. These companies are tied together every which way.
Moral relativism isn't a great argument to make - it's like saying it's ok to nuke Nagasaki and Hiroshima because Japanese did horrific things at Nanking. If the case was laughably weak, it would have been laughed off.
The problem is that if the super rich and powerful are allowed to blatantly show their middle finger to the law and profit, it creates distrust in government which historically resolves through revolution or nowadays in more peaceful countries resolves through election of unsavoury leaders to positions of power.
Doing a runner will probably irrevocably lose him a lot of popular support from people willing to give him the benefit of doubt no matter what PR dog and pony show he puts up. So looks like he's going to be in Lebanon for the next decade.
Whether or not he is guilty of any wrongdoings, I think what many people have picked up is what seems to be 'special treatment' he received from the Japanese authorities.
It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was.
For example the 3 former execs of Tepco who have been charged with criminal negligence in relation with the Fukushima disaster have never been arrested. I don't think that execs at Kobe Steel who knew about falsified data regarding defective airbags were arrested. Etc.
On the other hand, Olympus CEO, first foreign CEO, was fired for blowing the whistle on accounting fraud within the company...
> It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was.
Yeah, never happens, just like you almost never see any big profile politician beyond bars in Japan. And Japanese CEOs are pretty much affiliated to politicians, so there you have it.
By the way it is astonishing how much the press in Japan is painting Gohn as a culprit on an ongoing basis despite any actual trial and all. The media is completely sold to power here.
From what's being discussed in this thread it's more the other way around, he fled because he was receiving special treatment, had him being given a fair prosecution he wouldn't feel the need to flee Japan
> Also the Japanese were possibly reluctant to see a big Japanese company (Nissan) subsumed into a large international behemoth (Ghosn was trying to formally merge Renault and Nissan at the time of his arrest).
This is the most likely explanation given Japan’s history of xenophobia and that Nissan is a very high profile, iconic Japanese company
This is exactly right. I have worked for Japanese companies, do not underestimate the weight cultural pride had in how they prosecuted this case. It's not like the US at all.
The reason the Japanese government stuck its nose in Ghosn affairs is not particularly secret: it was to prevent the merger of Renault and Nissan, and was driven by Nissan employees who felt the merger was very one-sided (all power going to France). This is what was said in Japanese media shortly after Ghosn arrest.
But that's completely orthogonal as to whether Ghosn is guilty of anything. You don't get a free pass for fraud (embezzlement in this case) just because the context is political. I'm surprised that a lot of people are mixing these two things together. There is what Ghosn did, or is accused of doing (embezzlement), and there is why anyone went in to check (prevent the Renault Nissan merger).
The US government is also well known to use its judicial branch to exert political pressure on foreign actors (see the Alstom buyout by GE). That doesn't make the fraud perpetrated by individuals somehow acceptable. But it can justify governments getting involved to prevent these individual actions having larger consequences.
Right now we are back in medieval times, might makes right. If you have the power, you can create charges, evidence and flay some culprit like in the olden days.
The whole lawsaying is by now the equivalent of some medieval peasant justifying witch burnings by stating that "In a world ruled by god, god would intervene against evil, thus she was evil. This the law.."
Its just talking, to lower the mental load of the dis-sonance of thought and reality. This whole set of affairs lately, this is what civilisational downfall looks like.
Im sure, all those cooperate warlords have done no wrong, to have such powers.
I am Japanese and know a little about this incident.
Mr. Ghosn was arrested by an organization that specializes in investigating corruption and financial crime. They are under strong political pressure and will be shut down if Mr. Ghosn is acquitted. This means that Japanese corruption and financial crime will increase. So they will use whatever means they can to convict Mr. Ghosn.
> They are under strong political pressure and will be shut down if Mr. Ghosn is acquitted
Yes, prosecutors are incentivized to close their cases, and yes, Japanese prosecutors are very conservative about choosing which cases to bring. But nobody was threatening to shut anything down (nor would such an action be politically or bureaucratically feasible) based on the outcome of the trial.
If this is the case, I can see how Mr. Ghosn fleeing the country could benefit everyone involved. The prosecutors get to save face and get an easy conviction in absentia.
Regardless of what happens though, this will have a chilling effect on Japanese companies' ability to recruit foreign talent at top levels -- but it would have been far worse if Mr. Ghosn had been convicted and imprisoned.
Mr. Ghosn was arrested by an organization called the Special Investigation Department (Tokusoubu). Tokusoubu is hated by politicians and corporate executives to investigate corruption and financial crime. The authorities were always trying to shut down Tokusoubu, and in fact were weakening. It is unlikely that those in power will be able to intervene in the judiciary, but if Mr. Ghosn is acquitted, Tokusoubu is likely to be closed down.
No, GP is right. The prosecutors on the case are part of a division (特捜部) that is under pressure because they're mostly useless and have botched previous cases. If Ghosn is not prosecuted or is acquitted, heads are going to fall.
The way this has all unfolded is very interesting.
From the beginning, Ghosn has employed a team of publicists to manage his image during the arrest and trial. Their primary focuses have been on highlighting the injustices of the legal system in Japan and on portraying an apparent conspiracy against Ghosn perpetuated by Nissan and the Japanese government. It's not hard to see how successful they've been in getting support for Ghosn.
Meanwhile, this strategy has successfully shifted focus away from the charges themselves - charges that include Ghosn secretly shifting $5 million from Nissan to companies his wife and son own in Lebanon.
One point that is interesting in hindsight is that Ghosn decried the injustice of not receiving bail in January, when prosecutors successfully argued that he was a flight risk. He received it in March with heavy restrictions.
In hindsight, the strategy of managing his image, promoting a conspiracy, and denouncing injustice, all while diverting attention away from the charges, seems built with the intended outcome of him fleeing the country. Of course, it probably wasn't planned that way, but it's certainly better to flee and rebuild your life when international public opinion is in support of you rather than against.
In any event, the likely outcome now is that we will never find out the truth behind the four charges against Ghosn.
That said, I always wonder why people don't abscond more often when facing charges that will see them jailed for the rest of their lives. I suppose it's more likely than not that he did at least some of the dirt he's accused of. But from his personal perspective, the choices are the life of a fugitive and the life of a prisoner (in Japan, no less, which is famous for its harsh treatment of prisoners). For me, the choice would be obvious.
So? My honor, like my privacy, is valuable to me without having to attach to it a material worth. My honor is refusing to live a lie and therefore denying myself.
I would much rather die knowing I lived like Havel, then his infamous grocer.
(In case you don’t know Havel, he’s one of the thousands of bright lights who refused to live a comfortable lie in the Eastern bloc and took down an empire. The government is more scared of honorable men, then men who would flee)
> For some of us the dishonor for breaking our word is worse than being jailed unjustly.
I would guess the set of such people is very nearly disjoint with the set of people who actually have been jailed unjustly. With perhaps the exception of idealistic dissidents who have been jailed for the cause.
I can't wait for the Netflix series on this. Having lived with many of them over the years, I've always admired the sheer entrepreneurial energy of the Lebanese diaspora. Remember, Carthage was founded by ancient Phoenicians (modern-day Lebanon) and its strength came from its business and financial prowess [0]... and was Rome's greatest threat at the time. This [1] more recent article from the Economist discusses this as well.
[0]https://en.wikipedia.org/wiki/Ancient_Carthage#Economy
[1]https://www.economist.com/business/2013/03/16/a-tale-of-two-...
I'm pretty sure Ghosn isn't a saint, but he has a strong point regarding the Japanese Legal System which in practical terms is no system at all since if you get accused of something there's an almost 100% chance you'll get convicted no matter what.
Also, AFAIK the Japanese side of the board has been withholding information, straight up lying and everything in between to the other part of the board regarding strategic and everyday operations stuff.
I don't know if it's due to the usual egomania and personal agendas, but if their strategy is to burn the 3rd biggest automaker to the ground and then be kings of their little kingdoms they are doing a great job.
I am going to go out on a stretch and say that reason he fled is that he is guilty of what he is being suspected of and not because Japan has a "rigged" legal system. And his corrupt buddies back in Lebanon are helping him because he has got millions in ill gotten gains stashed away there.
Lebanon is facing a massive bank haircut due to the current financial crisis there. I'm sure an international globe trotter like ghosn has bank accounts in other countries.
> I am going to go out on a stretch and say that reason he fled is that he is guilty of what he is being suspected of and not because Japan has a "rigged" legal system.
Him fleeing doesn't give you any new information on wether he is guilty or not.
If I was innocent but accused of his crimes in Japan, I would also flee, because once you are accused in Japan their is basically no way to defend yourself, you are going to get convicted no matter what, so why would anyone, guilty or not, stay?
I'm no fan of CEOs, but can anyone here honestly say they would stay and stand trial in a place with a 99.9% conviction rate? That's stalinist level "justice".
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[ 3.5 ms ] story [ 186 ms ] threadMoving internationally with fraudulent credentials would land most people in jail, but it seems the local government "loves" the man (no doubt his money helps with political favours), so he's safe from that too.
One, that still involves travel on a fake passport. Two, Ghosn isn’t a Turkish citizen.
> I would have to think he already had the OK from the Lebanese government
Why? This is a classic ask-for-forgiveness-not-permission situation. (Lebanon doesn’t have an extradition treaty with Japan.)
Seems like the CEO of multiple major multinational corporations would be the sort of person who would need this.
So maybe when Ghosn was required to hand over his passports, he gladly handed 3 of them over, quietly retaining 1 or more in a safe place.
It is possible in France to have several passeports of there are reasons for that (for instance what you have in one passport forbids you to enter another country, or could put you in danger...)
Ghosn may have had convinced the authorities to deliver him more passports.
On the flip side of that... I quake with terror at the thought of ever being charged with a crime in Japan. Repeated interrogations without the right to have a lawyer present? Delaying charges in order to secure multiple detentions? Harsh conditions of bail?
All of these things seem to be engineered to produce guilty pleas or convictions without a lot of pesky pushback from the accused.
That is, people tend to side with what feels right In a given situation rather than what is the best policy for a government to execute over millions of people over centuries.
The Supreme Court only allows the exclusion of incriminating evidence only when it yields “appreciable deterrence”. In practice, this means that if police obtained a valid warrant (at the time), then the evidence is still admissible even if the warrant was later found to be illegal.
Case: https://supreme.justia.com/cases/federal/us/564/229/
(Hat tip to peteretep for the updated figure).
https://en.m.wikipedia.org/wiki/Conviction_rate
At least 5-10% of people get off on technical details the police or prosecutors messed up or just good lawyering of guilty people. The rest the cases fall apart before trial because of witnesses or other evidence and turns of events. (I’m pulling these numbers out of my ass just to make a point).
The problems in Japan are with the due process and a serious lack of rights of the accused. Even if we completely ignore the conviction rates.
In the UK, the CPS only prosecute cases with “a reasonable chance of conviction”, which I guess means they essentially choose the conviction rate they’re aiming for?
We saw how that works in practice recently with that FBI report where the judges were basically yes men trusting everything the FBI told them without even basic scrutiny...
The Japanese system is more on the input end regarding due process and rights to counsel.
It is therefore expected that conviction rates should be relatively high whether in the UK or Japan.
However, 99% really looks like rubber stamping a decision that was already made by the police... and that's a red flag.
https://www.prisonstudies.org/country/united-states-america
I don't see that. Most press commends him for turning around Nissan and Renault.
He may have gotten greedy. His downfall was more due to social norms. Greed is perceived in a good light in the USA. Greed is a cardinal sin in Japan. (I'm generalizing)
Ghosn probably felt he should have taken the GM job when Obama offered it to him. His counterpart there was easily making more than he was despite all the financial engineering he had to do to get what he viewed as fair compensation
That being said, nobody does anything about it in the USA for various reasons, and I’ll accept that the USA is certainly one of the easier places in the world to get away with egregious greed.
Japan and France, where Ghosn was CEO of 2 companies, have strict compensation caps for executives. In the USA there is no such thing. The cultural perception of making a lot of money is different in Japan and France vs USA.
That's not strictly true. There is a tax code provision that prohibits companies from counting executive compensation of over $1MM as an operating expense, the intention being to discourage high compensation by essentially putting an additional tax on the excess compensation. It's not very effective, particularly since "performance-based" compensation was exempt until a couple years ago.
There are also harder limits for executive (and other people's) compensation in government contracting. Somewhat more effective than the above, but still not great.
Japan, CEO gets paid $1 million a year. Engineer makes $60k
USA, CEO gets paid $100 million a year. Engineer makes $300k
I much prefer the higher paid CEO as he's paying me 5x what my Japanese counterpart gets paid.
On top of which in Japan I have to grovel up to my CEO and speak to them like royalty using super groveling language where as the CEO in the USA can call by their first name and treat them as just another person.
Americans don’t view greed positively, we are too busy trying to survive a rigged system without falling victim to some financially crippling life event.
Though all countries look askance at "them furniners" eg The HP / Autonomy Trial.
Yeah! That's why Martin Shkrelli was so admired as a national hero in the U.S.
...right?
I can't think of a single place on this planet where greed is admired, unless you want to over-generalize and lump in general capitalism and entrepreneurship -- but I think that the effort to over-define greed into any and all wealth accumulation is missing the actual point behind the concept of greed itself.
Greed is not perceived as negatively in the U.S. as in, for example, Japan, but it is not, here or anywhere I am aware of, perceived "in a good light". When you want to suck up to an executive in the U.S., you don't commend them on how "greedy" they are, because (in the U.S. like anywhere else), that's an insult.
But cut-throat monopolistic market domination, gaming, and consumer/employee abuse - that's just sound business ethics.
America definitely worships actions that many would consider to fall under the "greed" term, even if you don't. A great example is that Donald Trump's main qualification for being President was his wealth and business acumen. I think half the country would consider him a poster child for "greed" while the other half think his actions fit in on a resume.
Why can’t it be both?
We have evidence he turned the companies around [1]. And we have evidence he paid personally-affiliated companies money for dubious services [2], a track record that has been probed by multiple countries [3].
[1] https://www.goodreads.com/en/book/show/276268.Turnaround
[2] https://www.bloomberg.com/news/articles/2019-04-22/lebanese-...
[3] https://www.france24.com/en/20190703-france-police-raid-rena...
1. Ghosn was a talented CEO who engineered big turnarounds at Renault and Nissan, who also was likely embezzling from the company.
2. The Japanese justice system is fundamentally tilted toward the prosecution, and is especially unfair to powerful foreign individuals.
Personally, I hope this to be a good show to Japanese people. The timing is good too. It is finally dawning on people in Japan that their government might not be entirely fair, and how the extreme rich like him can do shady dealings. Many of them have been too naive.
Japan, China and Many countries in Europe including Germany follows continental law. So probably just assuming that lawyers presence will change something substantially is not appropriate.
In those system a prosecutor only brings the case when they are convinced there is enough evidence to prosecute otherwise they themselves be on a hook, unlike common law jurisdiction. The only question here should be is the person given chance to defend himself and I believe in this case Japan did give enough chances so much so that the person moved all his wealth with his wife outside of Japan during trial. Send families to secure destinations with all the wealth.
Now himself absconded to a non extradition country. I hope such punishments are meted our to CEO of Enron, Lehman and many others in USA but didn’t happen.
Carlos knew very well the Japanese system when he agreed to work with Nissan. So all those stories of him being a victim is a pr run by his family and money.
Not sure what crime you think the CEO of Lehman Bros. committed (is not having enough pull with the Fed and US gov to get a bailout like the other large banks a crime?)
As for the "many others", Martha Stewart went to jail for five months. Bernie Madoff got a 150 year sentence and is still in jail. Timothy Rigas (Adelphia Communications) served over 10 years in prison. Etc, etc.
If Carlos would were in the US, his assets would have been frozen and not permitted to flee.
Of course, how many of us mere mortals will be keeping our jobs after no-showing and zero contact for 3 weeks?
"The terms of Mr Ghosn’s detention meant he could leave his flat while on bail, but he was followed by three agencies — the police, prosecutors and a private detective."[1]
[1]https://www.ft.com/content/e0330dbe-2b45-11ea-a126-99756bd8f...
That same box was then flown to Turkey in a private plane, with him in it.
It’s reported that his wife arranged the entire affair.
Source?
https://www.indiatvnews.com/news/world/carlos-ghosn-nissan-s...
One thing I think we can be assured. Foreigners will be afforded less opportunity for bail going forward.
[1]https://www.thedailybeast.com/nissan-ceo-carlos-ghosns-great...
Mentions the musical instrument box, but I don't see the other details.
Edit: This site has the story including the band. No idea how credible it might be: https://gulfnews.com/world/did-nissans-carlos-ghosn-flee-jap...
On one hand, Ghosn is in Lebanon. That’s where people with the full story are.
On the other hand, Ghosn is popular there. An MI6-style escape sounds better than the likelier reality of massive bribes having been paid.
Simply getting through immigration and customs requires (a) gambling you get a distracted agent or (b) paying a bribe. Given the consequences with (a), it's not surprising that pretty much every fugitive-by-air account features bribes.
There are many more steps that are tightly watched in getting on an international flight, even one privately chartered, particularly out of Japan.
[1] https://gulfnews.com/world/did-nissans-carlos-ghosn-flee-jap...
[1] Japan has very few protection for suspects and more than 99% conviction rate. There's a great movie about the justice system there that is worth seeing: I Just Didn't Do It, それでもボクはやってない
> within days of his arrest, a billboard with his portrait loomed over the streets leading to downtown Beirut. “We are all Carlos Ghosn,” it read. The executive’s incarceration united the country’s usually fractious politicians around him.
Interesting how different he is viewed by different countries.
Specifically he's accused of:
1) Concealing the true scale of his retirement package, none of which had been paid
2) During the '08 crisis he had Nissan temporarily take on hedging contracts (used to blunt the impact of currency fluctuations of the yen) since his bank was demanding collateral he didn't have; then later securing a line of credit from a Saudi businessman who was paid $14 million by Nissan (ostensibly for regional distribution)
I'm no forensic accountant but that's not a lot of smoke, much less fire. The retirement package was still theoretical and it's hard to believe a man being paid $20 million a year was really engaging in financial skullduggery for what amounted to peanuts of his net worth.
As others in this thread have pointed out, this seems to be a case of the Japanese looking down on greed, whereas it's the norm in America and some parts of Europe.
Also the Japanese were possibly reluctant to see a big Japanese company (Nissan) subsumed into a large international behemoth (Ghosn was trying to formally merge Renault and Nissan at the time of his arrest).
Ghosn is probably right that he can't get a fair trial in Japan's notoriously prosecutor-friendly justice system. Even the Businessweek article notes the conviction rate is at or near 100%.
Ghosn may have been arrogant and greedy but unless new details are presented the publicly available evidence suggests these charges are extremely flimsy.
The elephants in the room are the payments made to a Beirut-based entity affiliated with his son [1][2].
[1] https://www.bloomberg.com/news/articles/2019-04-22/lebanese-...
[2] https://www.lesechos.fr/industrie-services/automobile/renaul...
GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives." At some point later, SBA paid GFI. The Japanese suggest this was a kickback scheme but 1) the fact that one firm paid another and vice versa is not ipso facto evidence of financial wrongdoing 2) if this really is a kickback scheme, why such low sums of money relative to his net worth?
The other accusation in the articles you reference is that GFI made payments to a company named "Shogun Investments", of which Ghosn's son was involved, and that he directed those funds to his own financial startup, "Shogun Enterprises", which then possibly used the funds to buy a yacht.
The first charge has no clear basis for impropriety, and the second is against Ghosn's son, not Ghosn (and btw, even if Ghosn's son did misuse investor funds -- and he denies doing so -- it wouldn't be the first startup in the world to do so).
Unless you can explain to me something I'm missing these accusations do not strike me as "the elephant in the room."
Nissan-Renault paid "overseas distributors" for services allegedly never rendered. Those funds then found their way to GFI, a Ghosn family controlled entity. This is, if true, embezzlement.
It was this finding that caused Ghosn's support at Renault to crater. It's also what prompted the French probes.
Both articles describe the transfers as misappropriations of funds. These transfers were a revelation not only to Nissan, but also to Renault. They prompted probes in both France and Japan (and likely will, at this point, in the United States), it fits a pattern of embezzlement.
Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
The Japanese criminal-justice system is deeply flawed. But allegations are made in multiple cases across multiple jurisdictions and describe seriously criminal behavior.
A lot of his complaints was that the prosecutors were leaking TONS of info but he was prohibited from replying and that he had no guarantee of a trial date.
This whole compensation thing seemed so weak. The filings disclosed what he was paid, there was no agreement to pay him more. He was keeping track it seemed like of what he felt he should get paid. I'm sure he (and many other CEO's) sometimes calculate how much they believe they should get -> maybe they propose those numbers to the board etc. How is that criminal? He wasn't paid that much if you look at it. There are .bomb scammers getting paid far more.
The other odd thing is the claim that he didn't render services. By all accounts the guy was a workaholic.
For this he's been in jail with no confirmed trial date. Given the supposedly slam dunk nature of the case why don't they go to trial on the compensation FEIL charges?
Given the specific payments aren't publicly detailed, it would be impossible to say.
> And folks said these types of payments generally got a lot of levels of approval?
This is contradicted by both Nissan and Renault's Boards. (The approvers were Ghosn and the other executive in jail in Japan.)
"Describing as" != prove. And when it comes to throwing people in jail we should strive for prove.
> Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
First, no Nissan funds were in Ghosn's "personal account." Not sure where you're getting that. The articles clearly describe GFI as an arm of Nissan directly controlled by Ghosn but that is not a personal account -- it was still a Nissan account.
Second, Ghosn's defense has been all along that others in the firm approved the transactions. Someone somewhere was clearly signing the checks -- I don't know how true this is but it is a legitimate defense.
Allegations are not proof. I can accuse you of anything -- doesn't make it true.
Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it.
Pre-trial detention is common worldwide. In this case, it was loosened. (Clearly, too much.)
> Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it
It's not proven. That was for the trial to conclude. Criminal efforts in Japan, France and elsewhere will continue.
There is a preponderance of evidence, the legal standard in most jurisdictions, for bringing charges around embezzlement. I agree the compensation charges were weak. But they weren't the bombshell.
In any case, we'll get the facts over the coming years. The Japanese case will continue. And Ghosn fleeing will likely prompt investigations in the United States, at the very least for asset seizure.
Given how conservative Japanese prosecutors are reputed to be in bringing cases in the first place and Ghosn's decision to flee , I'd bet they have reasonable evidence.
Olympus - Accounting fraud - overseas whistleblower was the one prosecuted!
Lots of other cases - Japanese CEO's doing MUCH MUCH worse face zero prison time and/or prosecution.
A lot of folks posturing here. The compensation charges - which would have been the first to go to trial if they'd ever gotten to trial (the prosecutors have been dragging things out) were laughably weak. If this is what puts CEO's in jail for years it's a total scam - 100's of japanese CEO's do this and much more. These companies are tied together every which way.
The problem is that if the super rich and powerful are allowed to blatantly show their middle finger to the law and profit, it creates distrust in government which historically resolves through revolution or nowadays in more peaceful countries resolves through election of unsavoury leaders to positions of power.
Doing a runner will probably irrevocably lose him a lot of popular support from people willing to give him the benefit of doubt no matter what PR dog and pony show he puts up. So looks like he's going to be in Lebanon for the next decade.
It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was.
For example the 3 former execs of Tepco who have been charged with criminal negligence in relation with the Fukushima disaster have never been arrested. I don't think that execs at Kobe Steel who knew about falsified data regarding defective airbags were arrested. Etc.
On the other hand, Olympus CEO, first foreign CEO, was fired for blowing the whistle on accounting fraud within the company...
Look at the Takata airbag executives. Their decisions resulted in the actual deaths of human beings and they were not treated as harshly.
Yeah, never happens, just like you almost never see any big profile politician beyond bars in Japan. And Japanese CEOs are pretty much affiliated to politicians, so there you have it.
By the way it is astonishing how much the press in Japan is painting Gohn as a culprit on an ongoing basis despite any actual trial and all. The media is completely sold to power here.
This is the most likely explanation given Japan’s history of xenophobia and that Nissan is a very high profile, iconic Japanese company
But that's completely orthogonal as to whether Ghosn is guilty of anything. You don't get a free pass for fraud (embezzlement in this case) just because the context is political. I'm surprised that a lot of people are mixing these two things together. There is what Ghosn did, or is accused of doing (embezzlement), and there is why anyone went in to check (prevent the Renault Nissan merger).
The US government is also well known to use its judicial branch to exert political pressure on foreign actors (see the Alstom buyout by GE). That doesn't make the fraud perpetrated by individuals somehow acceptable. But it can justify governments getting involved to prevent these individual actions having larger consequences.
The whole lawsaying is by now the equivalent of some medieval peasant justifying witch burnings by stating that "In a world ruled by god, god would intervene against evil, thus she was evil. This the law.."
Its just talking, to lower the mental load of the dis-sonance of thought and reality. This whole set of affairs lately, this is what civilisational downfall looks like.
Im sure, all those cooperate warlords have done no wrong, to have such powers.
Yes, prosecutors are incentivized to close their cases, and yes, Japanese prosecutors are very conservative about choosing which cases to bring. But nobody was threatening to shut anything down (nor would such an action be politically or bureaucratically feasible) based on the outcome of the trial.
Regardless of what happens though, this will have a chilling effect on Japanese companies' ability to recruit foreign talent at top levels -- but it would have been far worse if Mr. Ghosn had been convicted and imprisoned.
From the beginning, Ghosn has employed a team of publicists to manage his image during the arrest and trial. Their primary focuses have been on highlighting the injustices of the legal system in Japan and on portraying an apparent conspiracy against Ghosn perpetuated by Nissan and the Japanese government. It's not hard to see how successful they've been in getting support for Ghosn.
Meanwhile, this strategy has successfully shifted focus away from the charges themselves - charges that include Ghosn secretly shifting $5 million from Nissan to companies his wife and son own in Lebanon.
One point that is interesting in hindsight is that Ghosn decried the injustice of not receiving bail in January, when prosecutors successfully argued that he was a flight risk. He received it in March with heavy restrictions.
In hindsight, the strategy of managing his image, promoting a conspiracy, and denouncing injustice, all while diverting attention away from the charges, seems built with the intended outcome of him fleeing the country. Of course, it probably wasn't planned that way, but it's certainly better to flee and rebuild your life when international public opinion is in support of you rather than against.
In any event, the likely outcome now is that we will never find out the truth behind the four charges against Ghosn.
Besides, liberal freeing society collapses if we cannot or will not hold people to their word, replaced by totalitarianism.
Nothing. Asymmetrical power relationships are complicated.
I would much rather die knowing I lived like Havel, then his infamous grocer.
(In case you don’t know Havel, he’s one of the thousands of bright lights who refused to live a comfortable lie in the Eastern bloc and took down an empire. The government is more scared of honorable men, then men who would flee)
I would guess the set of such people is very nearly disjoint with the set of people who actually have been jailed unjustly. With perhaps the exception of idealistic dissidents who have been jailed for the cause.
Worse than the USA? The only place on earth I've heard of that has good treatment for prisoners is western Europe.
Most people wouldn't be allowed into other countries while facing such charges.
Also, AFAIK the Japanese side of the board has been withholding information, straight up lying and everything in between to the other part of the board regarding strategic and everyday operations stuff.
I don't know if it's due to the usual egomania and personal agendas, but if their strategy is to burn the 3rd biggest automaker to the ground and then be kings of their little kingdoms they are doing a great job.
Him fleeing doesn't give you any new information on wether he is guilty or not.
If I was innocent but accused of his crimes in Japan, I would also flee, because once you are accused in Japan their is basically no way to defend yourself, you are going to get convicted no matter what, so why would anyone, guilty or not, stay?
He's under indictment for corruption, and fled the country using what can only be described as corrupt means, hardly an endorsement.
Compare and contrast with the treatment of Julian Assange.