Business Insider Edition

Carlos Ghosn's escape from Japan is a nightmare for the country's justice system — and the ousted Nissan exec may now be looking to put that system on trial

Matthew DeBord , Business Insider US
 Jan 01, 2020, 04:06 PM
Ghosn released a video in April in which he accused Nissan of playing a "dirty game."
Carlos Ghosn
  • Former Renault- Nissan-Mitsubishi Chairman Carlos Ghosn has fled Japan, where he had been awaiting trial after a 2018 arrest on allegations of financial malfeasance.
  • In a statement, Ghosn confirmed that he was in Lebanon, where he is a citizen.
  • Lebanon doesn't permit its citizens to be extradited to Japan, so Ghosn's trial in Japan is likely dead.
  • Ghosn is an auto-industry celebrity who should now have the opportunity to tell his side of the story in detail - and likely rail against the Japanese justice system that imprisoned and detained him for over a year.
  • For more, go to Business Insider SA.

On Monday, former Renault-Nissan-Mitsubishi Chairman Carlos Ghosn escaped from Japan, where he had been in legal limbo, released from jail but awaiting trial on allegations of financial malfeasance and unable to travel.

Various reports suggested that Ghosn had fled Japan through Turkey. His destination was Lebanon, where he lived as a child, has citizenship, and is a business celebrity.

"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," Ghosn said in a statement.

"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."

Trapped in Japan while the alliance crumbled

Ghosn was arrested in Japan in late 2018 alongside Greg Kelly, a member of Nissan's board of directors. Imprisoned for months, Ghosn was eventually released but then rearrested. (He's been arrested a total of four times.) He had promised to hold a press conference in April, but he was arrested before that took place. Ghosn's lawyers later released a video in which he declared his innocence and labeled his arrest a "conspiracy," saying that Nissan's leaders were threatened by his assessment of their performance as poor and that they had played a "dirty game."

He then posted millions in bail and has been in Japan ever since.

While all this was going on, the Renault-Nissan-Mitsubishi alliance that he created was falling apart. Renault flirted with a merger with Fiat Chrysler Automobiles, and Nissan replaced its CEO, a Ghosn acolyte who assumed control after Ghosn's arrest.

Last December, I broke down the two main theories about why Ghosn, an auto-industry rock star, was arrested in the first place. They're still more or less valid, but Ghosn's escape adds a new dimension.

Theory No. 1 is that Ghosn did everything he's been accused of but that for years Nissan and Renault - a complicated, multinational colossus - looked the other way. Ghosn has long been a celebrity CEO in the auto industry, and though his star has dimmed in recent years as he eased toward retirement, it was widely thought that by joining Renault and Nissan and then adding the struggling Mitsubishi, he had pulled off the impossible.

The 'palace coup' theory

No. 2 is that a "palace coup" was executed at Nissan and that the Japanese carmaker wants to either shatter the alliance or revamp Renault's outsize influence. Renault owns 43% of Nissan, yet Nissan contributes most of the profits to the tripartite entity. Renault recently affirmed Ghosn's role as chairman and CEO and concluded that he didn't do anything wrong.

Parts of both theories are probably right. Ghosn was imperious and had enemies. He wasn't a kinder, gentler auto executive. He brandished his accomplishments and his position.

The investigations and indictments that followed Ghosn's arrest and later detention revealed a web of unusual financial dealings, but they didn't exactly make Ghosn into a criminal mastermind. Rather, they indicated that Ghosn had amassed a lot of perks in his two decades at the alliance and did things his own way. My impression was that much of this was OK until it suddenly wasn't.

"Having watched Ghosn in action for over a decade, I think it's unlikely he'd admit any wrongdoing," I wrote last year. "He's typically rather brusk and to-the-point, and he's far enough along in his career that he might not actually care if he comes off as a Machiavellian global plutocrat, bending every rule in the book while arguing that his ends justify his means."

What's new in all of this is that Ghosn can now presumably take his defense to an eager media. He is not going to go gentle into any good Beirut nights.

A reckoning for Japan's justice system

Nor should he. While we certainly learned that under his control the Renault-Nissan-Mitsubishi alliance resembled less a multiheaded manufacturing colossus and more a Byzantine empire for the globalism age, with courts on multiple continents and an accounting structure that would have impressed Machiavelli, we also learned that getting arrested in Japan isn't like getting arrested in America or Europe.

My initial thought when I heard that Ghosn had shown up in Lebanon was "Of course!" With his first arrest over a year old and the wheels of Japanese justice turning slowly, if at all, it didn't seem outrageous to conclude that the Japanese authorities might have wanted him gone. A Renault-Nissan merger that Ghosn had reportedly pushed for was dead; a trial was likely to be messy for the Japanese. He could rail away to Lebanon, but gradually their whole affaire Ghosn would fade into memory.

The full story won't emerge until Ghosn tells it himself, but now it appears that he had to engage in some heavy intrigue to flee Japan and that all bets are off. Not only will the Japanese not get a trial - Lebanon doesn't permit extradition of its citizens to Japan - but Ghosn is obviously planning to put the Japanese justice system itself on trial.

As he should. His lengthy and, by all accounts, arduous imprisonment was in no way justified by allegations of white-collar crime. His escape shows that the Japanese authorities were concerned above all about his getting out of the country from the beginning. Given all that's emerged about his financial maneuverings, his innocence is debatable even if none of it turns out to be illegal.

But his inability to defend himself as the presumption of guilt was amplified made it increasingly difficult to assume that whatever trial he got would be fair.

Ghosn has to explain himself, and that should be interesting, to say the least. But pretty soon we're finally going to hear his side of the story, in detail.

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