By on November 21, 2018

Carlos Ghosn Rogue Introduction - Image: Nissan

Disgraced industry phenom Carlos Ghosn, who still holds the title of Nissan chairman and Renault CEO (though likely not for long), could remain in custody for some time as Japanese authorities take their time in laying charges.

The news of Ghosn’s arrest amid allegations of severely underreported income fell like a hammer Monday morning, shaking the stocks of the automakers Ghosn guided since their tie-up at the end of the last century. From an opulent private jet to a sparse Tokyo jail cell, the auto titan’s journey this week surprised everyone.

According to The New York Times, Ghosn will spend at least 10 more days in custody, though Japanese law allows for suspects to be held for 23 days in the absence of charges. Authorities arrested Ghosn shortly after his jet arrived at Tokyo’s Haneda airport on Monday. An internal investigation conducted by Nissan fingered Ghosn and Greg Kelly, Nissan board member and former HR manager, in conspiring to underreport compensation levels to Japan’s Ministry of Finance.

The Tokyo prosecutors’ office claims the two men underreported Ghosn’s pay for four years (2011 to 2015), lowballing his compensation by $44.5 million — or half of his actual compensation.

After being led off the corporate jet, Ghosn was likely moved to a 50-square-foot room outfitted with a futon laid on the floor, as is Japanese practice, and stripped of belt, tie, and long socks. He’s allowed a small amount of clothes that can’t be fashioned into a noose.

“There will be no special treatment for Ghosn,” Tsutomu Nakamura, a former prosecutor told the NYT. “He will be treated in the same way as a burglar.”

By the end of the week, Ghosn will likely find himself stripped of more than just clothes — the titles under which he turned the Renault-Nissan Alliance (joined in 2016 by Mitsubishi) into the world’s largest automaker stand to be revoked by corporate boards. Nissan’s board will gather Thursday to vote on a motion to out Ghosn as chairman. Renault, on the other hand, seems to be weavering on Ghosn’s fate.

As reported by Bloomberg, there’s two sides at play. Some Nissan board members feel there’s a coup afoot, sources say, while others feel Ghosn simply got greedy. At Renault, the struggling automaker saved by Ghosn, top brass are taking a wait-and-see approach as the drama plays out in Japan. France holds a 15 percent stake in Renault.

Over the last couple of years, Ghosn had taken steps to move away from the companies he married, giving up the CEO position at Nissan. His successor, Hiroto Saikawa, was quick to denounce the fallen executive’s alleged actions, claiming the company had placed too much power in the hands of one man.

“Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,” Saikawa said Tuesday at a press conference at Nissan’s Yokohama HQ. The CEO said his top priority was minimizing the fallout of the allegations on his company and its workforce. In Tokyo, Nissan shares tumbled following news of the arrest.

Mitsubishi’s board will reportedly meet next week to decide whether to oust Ghosn as the automaker’s chairman. Meanwhile, Japanese state TV aired footage of Toshiyuki Shiga, Nissan board member and former chief operating officer, entering the Tokyo prosecutors’ office to submit to voluntary questioning.

[Image: Nissan]

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24 Comments on “With Charges Still Not Laid, Ghosn to Be Treated ‘As a Burglar’...”

  • avatar

    It is too bad that they couldn’t have done the same with Mr. Musk.

    My bad, the United States only makes someone prove their innocence when facing antiquated sexual abuse accusations.

  • avatar
    Null Set

    You watch. Hillary will bail him out, using money laundered from her pizza parlor in D.C.

  • avatar
    Null Set

    Does TTAC plan to launch a LeafWatch campaign? After all, VoltWatch worked so well.

  • avatar

    Does Nissan stock pay dividends? If so, now might be a good time to grab up a few shares at a nice discount.

  • avatar

    I’m going with coup. No way is there going to be a Renault-Nissan merger.

  • avatar

    “Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,”

    Saikawa was sharing Japan Inc.’s feelings that it took a damn dirty gaijin to bring Nissan back from the doldrums, not his frustration with one of the aristocracy getting caught leveraging corporate funds for some personal gain. That stuff definitely goes on in Japan….if you’re Japanese. If you’re a foreigner, the instant you make a mistake that someone can prove, you get crushed.

  • avatar

    Let’s make him the CEO of VW and a board member of Wells Fargo.

  • avatar

    Ford may need a new chief soon.

    • 0 avatar

      Laugh all you want, but that may not be a bad idea.

    • 0 avatar

      Well Ford did offer Ghosn a CEO job back in 2006 but he declined since Bill wouldn’t give up his chairmanship.

      So maybe if he doesn’t spend some time behind bars in Japan he might be more amenable this time around to settling for just the CEO spot! Well that’s if Ford doesn’t mind appearing too desperate after the board cans Hackett.

  • avatar

    What’s the basis of the charges, anyway? Is it related to income taxes?

    • 0 avatar

      I think that is a great question. They say he under-reported his income, but this could just be an investor-relations / SEC reporting type thing. Which seems likely – why would he risk cheating on taxes when he makes more money than he can spend?

      It took since 2011 to figure this out?

      • 0 avatar

        It’s financial reporting rules that he has allegedly broken, so it would be a securities law violation. (Taxes may also be involved, but that’s not the primary issue.)

        According to reports, the payments appear top have been funneled trough various subsidiaries so as to minimize the number of people who would be aware of them. In addition to the unreported income, there is also the purchase of $20M+ in luxury properties for essentially personal use.

  • avatar

    Sucks for Ghosn. My limited knowledge of the Japanese “justice” system is that their version of due process makes Gitmo look like the 9th circuit in the 1970s.

  • avatar

    How can he be “disgraced” if he hasn’t been charged with anything yet, let alone convicted?

    I thought first-world countries operated on the basis of “innocent until proven guilty”…

    • 0 avatar

      He is disgraced b/c they arrested him – did not respect his authority/reputation. But, yeah, the term seems to be dramatically used in this case, since Ghosn might be able to show this was a set-up job later

    • 0 avatar

      In Japan you can be held for up to 30 days and interrogated without being charged. If they actually charge you with a crime, Japan’s conviction rate is probably like 99%. At that point the actual trial is more of formality, I think…

      Japan isn’t really “First World” socially, just technologically.

    • 0 avatar

      Innocent until proven guilty is hallmark of the US civilian justice system. It is not in other countries, however. France comes to mind, but I’m going by old memories.

      Not even the US military, the burden of proof is on the accused.

  • avatar

    From Hero to Villain in short 15 years.Same thing happened with Hitler, Stalin and Ender.

    Japan is not exactly “first world country” mean is implies Western European country. It is still archaic socially.

  • avatar

    Things may not be as simple as they seem:

  • avatar

    Can you imagine if American authorities prosecuted corporate crooks for, well, anything? Our financial crooks nearly crashed the entire world economy and got off scot-free—nay, were rewarded with a tax cut. This guy misappropriates corporate money to buy himself real estate and understates his income and gets “treated like any other burglar.” As it should be.

  • avatar

    Ghosn gave up day to day operations in April 2017 but now its nearly 2019 and this comes out now? Why now? Cui Bono?

    He wasn’t secret about flashing his wealth during the period of accusation. This is either corporate politics or a witch hunt.

    “Ghosn stepped down as CEO of Nissan on April 1, 2017, while remaining chairman of the company.”

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