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  • Rushmi Rosairo

Monday Market Musings>>> The Scandal of Carlos Ghosn

Updated: May 26, 2022

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Carlos Ghosn, born in Brazil to Lebanese parents, the story of this 64-year-old multimillionaire is like something straight from a movie. He took Nissan, when the car-maker was struggling to stay above water, near bankrupt, and made it a major player in the industry. Ghosn made his rather captivating escape in a crate, aboard a private jet on December 29th 2019, in order to avoid false charges of financial indiscretions, as he claims.

Mr. Ghosn was the CEO of Nissan and former Head of Renault, mastermind of the car-making alliance between Renault, Nissan and Mitsubishi. In November 2018 he was arrested on charges for concealing around $80 million income, if convicted, he would face 15years in prison. Following his arrest, Ghosn was repeatedly arrested and eventually charged with four counts of financial misconduct. He was held in solitary confinement during his time in prison(months), subjected to repeated questioning without the presence of his lawyer (“hostage justice”, a standard practice in Japan). Convinced that he would not get a fair trial, he planned his escape to Lebanon via Turkey.

Picture Credit: The Wall Street Journal website

After spending long periods of time in custody at a detention center in Tokyo, Ghosn was granted bail several weeks before his escape; crossing the streets of Tokyo in disguise, he arrived at an airport in western Japan. Being seen and recognised was not a risk he was willing to take, he had to stay hidden, “And the only way I could be hidden [was] to be in a box or be in a luggage so nobody could see me, nobody could recognise me and the plan could work.” Said the multimillionaire. The plane had been scheduled to depart at 11pm, Ghosn had to wait it out inside the music equipment case for about an hour and a half, he recalled that it felt like “one year and a half”. After landing in Lebanon, without the stress of extradition, Mr. Ghosn was thrilled to be able to “finally tell the story”.

Greg Kelly, Nissan’s former general counsel, along with Ghosn was arrested in November 2018, for under-reporting up to $80 million income. Kelly and Ghosn both alleged that said charges were cooked up by their former Japanese colleges at Nissan. Reasoning behind it being the potential full merge between Nissan and Renault, an issue which should and would have been resolved within the board with discussions, according to Mr. Ghosn.

Kelly had been accused of violating a financial regulation that requires executives earning more than 1 billion yen to disclose their pay, Kelly denied any indiscretions. March 2022, was found guilty in a Japanese court and given a six-month suspended sentence. Due to concerns over Japan’s concerningly harsh justice system, U.S. ambassador, Rahm Emanuel had been keeping a close eye on the case. From Beirut, Ghosn showed his dismissal of the verdict, stating it as “a joke, a farce, bogus. Greg is innocent. Greg is a lawyer who stayed within the law at all times”.

Michael Taylor, an American former special forces soldier and his son Peter Maxwell Taylor who helped Ghosn elude the Japanese justice system, face almost three years in prison for their part in helping Ghosn escape.

Picture Credit: Business Insider website

Untoward attention has been drawn toward the Japanese justice system. Concerns due to Mr. Ghosn’s accusations that he had been subjected to rather harsh conditions during his time in prison in order to compel him to confess to the charges he claims he is falsely accused of. Suspects are not allowed a lawyer at interrogations, said interrogations would happen repeatedly and lasts for hours, whereas suspects are only allowed to spend less than a hour with their lawyer. Suspects may also be detained for a period up to three weeks without a charge, and more than 98% of criminal cases end with guilty verdicts, a fact which perplexes U.N lawyers.

The U.N. Human Rights Council’s Working Group on Arbitrary Detention said that it would refer the case to the U.N.’s envoy on torture, cruel and inhuman treatment, seeing the decision to repeatedly arrest Mr. Ghosn in order to extend his detention period was “fundamentally unfair”. “The multiple arrests of Ghosn appears to be an abuse of the rule of law intended to ensure that he remained behind bars,” the panel stated, “This recurring pattern of detention was an extrajudicial abuse of power that has zero legal basis in international law.” Mr. Ghosn’s lawyer agreed, saying that Ghosn’s detention was illegal and that his treatment had been “unfair and disrespectful”.

Ghosn is currently barred from international travel by an Interpol “red notice” which he is hoping to have lifted, in addition to that, France has recently (April 2022) issued five international arrest warrants as part of a separate investigation on allegations of suspicious payments involving a distributor in Oman and from a Dutch subsidiary to consultants. According to Ghosn’s lawyer Francois Zimeray, the news had been surprising, due to the fact that Ghosn had always been co-operative with French authorities.

In the meantime, Mr. Ghosn and his wife are living in Lebanon, he has taken on new consulting work via video calls and he is still working on disproving the Japanese charges. Although he is prevented from sitting on boards, Ghosn has taken equity in companies he has advised. According to Ghosn, he would avoid working directly in the car industry in the future.

May 23rd 2022 | 6:00 PM

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