Compass World: Grand Theft Auto CEO

Former Nissan CEO Carlos Ghosn with a Nissan Leaf. (Wikimedia Commons)

Lebanon’s judicial authorities dramatically rejected the Japanese government’s extradition request for escaped ex-Nissan Chairman Carlos Ghosn, who faces four charges of financial misconduct, last week.

"Le Cost Killer"

The tale of Carlos Ghosn, one of Japan’s few foreign corporate executives, is a curious one. Ghosn joined the auto industry in 1978, working for tire manufacturer Michelin. After 18 years, and after becoming CEO of Michelin North America, Ghosn joined automaker Renault in 1996 as their executive vice president, hired to save it from bankruptcy. Ghosn reduced the workforce, standardized vehicle parts, reformed the production system, increased profit margins, saved the company, and earned himself the nickname “Le Cost Killer”.

While at Renault, Ghosn also became CEO of Nissan in 2001 and chairman of Mitsubishi in 2016, earning a salaried position from all three car manufacturers. Although he was one of the most important CEOs in Japan and in the entire auto industry, he was arrested in November 2018 on charges of financial misconduct. He was accused of misrepresenting his salary and taking company assets for personal use. Japanese prosecutors alleged that Ghosn only reported half of his $88.7 million income from 2011 to 2015. While in Japan, he could have faced up to 10 years in prison and a fine of 10 million yen (around $100,000).

For an Auto CEO, You'd Think he Would Use a Car

Ghosn posted his $8.9 million bail in April 2019, after 5 months in the Tokyo Detention Center, and returned to his monitored Tokyo home. On December 29, Ghosn left his home; the next day, he would be in Beirut. While Ghosn has so far refused to divulge how he escaped, the caper’s full picture is becoming clearer. Meticulous planning over several months, involving a team of accomplices including his wife Carole, led to the successful getaway, a source reported to the Wall Street Journal.

Ghosn left his house on December 29 and walked 800 meters to a nearby hotel, where he met two men. The three took a train to Osaka and, in Osaka, entered a hotel near its Kansai International Airport. After two hours, the two men left with two containers, one thought to contain Ghosn himself. At around 10:30 p.m. that night, the two men and a container boarded a private jet bound for Turkey. From Turkey, Ghosn took a private jet to  Beirut’s Rafic Hariri International Airport and entered Lebanon, where he is a citizen.

In Japanese detention, Ghosn became increasingly convinced he would have no fair trial in Japan. Ghosn would ask his lawyers again and again if he could expect a fair trial in Japan, and “their answer was always no — no criminal defendant in Japan can expect a fair trial.” This statement is no hyperbole: critics believe it reflects Japan’s unique and flawed justice system. Ghosn, in Lebanon, has said he was fleeing political persecution and a rigged justice system.

Driven to Confess

Japan has a 99.3 percent conviction rate. When Ghosn’s lawyers said that no criminal defendant can expect a fair trial, they meant it. The Justice Ministry argues that only cases highly likely to win a conviction go to court, explaining their high conviction rate as a result of an indictment rate of only 37 percent.

Japan's justice system has been branded as “hostage justice” by critics. Legally, suspects can be held for only 23 days before prosecutors must decide whether to indict them. In practice, however, prosecutors can extend detention periods in perpetuity if they issue fresh arrest warrants for related crimes; Ghosn himself was detained for 130 days. Suspects also do not have the right to a lawyer during interrogation, another practice that has been internationally condemned. Critics allege that suspects face a huge pressure to confess. Interrogations can often last up to 12 hours without a lawyer present. Given that 89 percent of criminal convictions in Japan are based partly or wholly on confessions, these statistics are worrying.

In the wake of Ghosn’s escape, Japan may see changes to its justice system. In an interview with the Japan Times, Justice Minister Masako Mori, although defending the justice system she leads, said that the system is not perfect, and that she would push for changing security measures and bail conditions to spur policy changes. Ghosn may certainly be a criminal, but the spectacle of his escape has drawn important attention to Japan’s judicial institutions.