Carlos Ghosn readies for epic legal fight after finally being freed from Tokyo jail
The odds have been stacked against Carlos Ghosn, the once high-flying head of Nissan Motor Co. and Renault SA, since he was arrested in a country with a 99% conviction rate more than three months ago. Now, his luck may finally be turning.
Ghosn walked free from Tokyo’s main jail late Wednesday afternoon for the first time since November, a day after a court accepted the latest of his applications for bail. He departed from the detention center in a silver Suzuki van, although reporters nearly missed him as he was wearing a baseball cap and face mask.
Ghosn posted a hefty bond of 1 billion yen ($9 million) and agreed to remain under close supervision in Japan, where he’s been indicted on a range of charges of financial crimes relating to his two-decade tenure at Nissan.
Free after months of interrogations and spartan prison conditions, Ghosn’s first stop was his lawyer’s office. He changed into a suit, his uniform in countless boardroom battles that propelled the Franco-Brazilian executive to the top of the global auto industry, where he held the alliance among Nissan, Renault and Mitsubishi Motors Corp. together.
It was a telling move. Ghosn’s release allows him to start planning in earnest for what’s sure to be a remarkable trial, one where a guilty verdict could see him put back behind bars for many years. Japanese prosecutors say Ghosn engaged in a pattern of financial misconduct, but he’s emphatically denied wrongdoing and has argued the charges are the result of a conspiracy within Nissan to block his plan to merge the car maker with Renault, its largest shareholder.
Japan’s penal system limited Ghosn’s contact with family, colleagues and his legal team, which he replaced less than a month ago. Out of jail, “he’s able to collect information and it will be easier to communicate with his lawyers and work out a defense strategy,” said Nobuko Otsuki, a Tokyo-based defense lawyer. “It would definitely be advantageous.”
But it may not be comfortable, especially for a jet-setting polyglot who logged extensive air miles while running the world’s biggest auto alliance. Ghosn is barred from leaving Japan and will have surveillance cameras watching the entrances to his residence, the location of which is unknown. He can’t go on the internet or contact people involved with the case. His mobile phone and computer use will be restricted.
And Ghosn’s in for a tough fight. Japan’s criminal-justice system boasts a near-perfect conviction rate that’s comparable to China’s, and prosecutors enjoy a wide range of procedural advantages unavailable to their counterparts in the West. He could be re-arrested on fresh charges at any time, putting him back behind bars with the trial likely months away.
Ghosn will, however, be better equipped to assist his lawyers from outside prison walls. His home until Wednesday had been a cell of about 75 square feet, where he had no access to a phone, email or personal documents. That put him at a severe disadvantage fighting charges premised on subtle interpretations of Japanese law and involving complex transactions executed as far back as 10 years.
The bail win vindicates the decision by Ghosn to abandon his previous Japanese legal team, which was headed by former prosecutor Motonari Otsuru. Soft-spoken and deferential to his ex-colleagues, Otsuru took a just-the-facts approach to advocating for Ghosn, declining to comment on potential intrigue by Nissan. His new lawyer, Junichiro Hironaka, has been more aggressive, notably warning Japanese officials that Ghosn’s case could jeopardize investor confidence in Asia’s second-largest economy.
“To the extent he can bring public opinion, global public opinion, to bear on Japan and the Japanese legal system, that has to have an impact,” said Stephen Givens, a professor of law at Sophia University in Tokyo, of Ghosn’s defense. “The judges who are looking at this case, somewhere in the back of their minds, they have to think, ‘this is not playing well outside of Japan.”’
Ghosn’s fall from grace will go down among the most memorable in recent corporate history, roiling the relationship between Nissan and Renault, which are partners in a complex alliance of cross-shareholdings and shared production.
Ghosn and Nissan: Another CEO with too much power is about to lose it all »
He helped save Nissan from the brink of bankruptcy after he was installed as chief operating officer by Renault in 1999, but the Japanese automaker fired Ghosn from his role as chairman almost immediately after his arrest, saying it had found “substantial evidence” that he repeatedly misused company funds.
French automaker Renault, where Ghosn served as chairman and CEO, has said it hasn’t uncovered wrongdoing, but he lost his positions there as well in January.
Ghosn is charged with aggravated breach of trust for alleged acts related to payments — from a pool of money that only he had the authority to use — to a company controlled by the automaker’s Saudi Arabian business partner, Khaled Juffali. He also is accused of filing false statements to regulators regarding about $80 million in deferred income during his time as Nissan’s chairman.
Nissan’s CEO, Hiroto Saikawa, led a team of executives who covertly assisted prosecutors to engineer Ghosn’s arrest — the culmination of an internal probe into the chairman of which Renault received no word. The role of Saikawa, who was a protege of Ghosn’s but criticized plans for a merger, is one of the central planks of Ghosn’s claim that he’s the victim of a coup by rivals.
In addition to his legal battle, Ghosn now has better access to the court of public opinion. Saikawa and other Nissan executives severely criticized Ghosn during his detention, portraying him as an out-of-control boss who mistook the company’s resources for his own.
Normally combative and media-savvy, the former chairman had little chance to defend himself — until now.
In a statement Tuesday night, Ghosn said he was “extremely grateful” to family and friends who had supported him and that he was “innocent and totally committed to vigorously defending myself in a fair trial.” Nissan declined to comment on Ghosn’s release, saying it had no role in decisions made by courts or prosecutors.
