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Explainer

What Really Happened to Carlos Ghosn?

Nissan just filed a lawsuit against its former CEO. Here’s why—and what could happen next.

Carlos Ghosn
Carlos Ghosn addresses a crowd of journalists in Beirut on Jan. 8. Joseph Eid/AFP/Getty Images

Nissan Motor Co. filed a lawsuit Wednesday against its former CEO Carlos Ghosn seeking $90 million in damages for “misconduct and fraudulent activity” and “corrupt practices over many years.”

It’s the latest move in a monthslong legal dispute between Nissan and Ghosn, a national of France, Brazil, and Lebanon who had been awaiting trial in Japan until he fled to Lebanon in dramatic circumstances this past December.

Ghosn is something of a celebrity in both Japan and Lebanon for his role in turning Nissan’s fortunes around from near-bankruptcy in the late 1990s. Between 2001 and 2002, Ghosn was depicted in a manga series called The True Life of Carlos Ghosn. When news of his November 2018 arrest reached Lebanon, the country’s then-Interior Minister Nohad Machnouk was defiant, telling a security conference in Beirut that “a Lebanese phoenix will not be scorched by the Japanese sun.”


How did Ghosn make his mysterious escape?

Ghosn’s flight from Japan’s authorities began simply—he walked out of the home in which he was staying under 24-hour surveillance as part of his bail terms—and then got steadily more complicated.

According to investigations by the Japanese news outlets NHK and Nikkei, Ghosn met with two conspirators at a nearby hotel, who then took him on a high-speed train to Osaka. After spending the night at an airport hotel, Ghosn’s accomplices left for the Kansai airport to board a private jet—all while lugging a large concert equipment box concealing Ghosn inside. According to reporting by the Wall Street Journal, the X-ray machine at Kansai’s private terminal was not large enough to scan the box, allowing Ghosn to be smuggled aboard a flight to Istanbul. Once there, Ghosn boarded another private flight bound for Beirut, where, according to Lebanese authorities, he used his French passport and Lebanese identification card to gain entry. French authorities have denied his use of French documents to enter Lebanon.

The audacious escape required a team of experienced operators to work and included at least one American, former U.S. Green Beret Michael Taylor, according to reporting by the New York Times. Taylor now works as a security consultant and is known for his familiarity with Lebanon. On Jan. 30, Japan issued arrest warrants for Taylor, his son Peter Taylor, and another alleged accomplice, George-Antoine Zayek.


What is Ghosn actually accused of doing?

Wednesday’s suit seeks to recover expenses that Nissan says Ghosn incurred fraudulently using the company’s accounts. According to a statement issued by Nissan, those costs include the use of overseas residential property without paying rent, private use of corporate jets, payments to his sister, and payments to his personal lawyer in Lebanon.

Nissan’s latest suit adds to existing charges against Ghosn of financial misconduct, including embezzlement. One of the most recent charges came after an internal Nissan investigation highlighting $35 million in payments made to a company distributor in Oman. It is alleged that some of this money was used to purchase a yacht for Ghosn and to furnish investment capital for his son’s company.

Writing in Nikkei after Ghosn’s initial arrest, the Tokyo-based corporate lawyer and academic Stephen Givens called the case against the former CEO “less serious than the corporate misfeasance that is routinely overlooked in Japan.” Givens has also written that the case gave off “the strong impression that from the start this has been a fishing expedition in search of a crime.”


What does Ghosn’s case tell us about Japan’s legal system?

Under Japan’s justice system, authorities can hold those suspected of committing a crime for 23 days without an indictment. Critics say that length of time is arbitrary, as prosecutors can simply bring new, slightly different charges against the accused to reset the detention clock. Using these tactics, Japanese prosecutors were able to hold Ghosn in detention for 108 days.

Critics say these methods can lead to false confessions, not least because defendants are not allowed access to lawyers during this period of questioning. On April 10, 2019, in light of Ghosn’s long detention, Human Rights Watch issued a statement signed by over 1,000 Japanese legal professionals calling for an end to this practice, known as hitojichi shiho or “hostage justice.”

Japan’s Minister of Justice Masako Mori refuted Ghosn’s protests over the manner in which he was held in a Jan. 9 statement: “In Japan, a suspect has a right to remain silent and to seek advice from a lawyer without the presence of a witness. The basic human rights of a suspect is duly taken into account by giving [an] adequate break to the suspect during the interrogation.”

Although Ghosn’s is the case grabbing headlines, Brad Adams, the executive director of the Asia division of Human Rights Watch, said that ongoing research suggests that the Japanese system of hostage justice affects the poor more than any other class. “This is a system set up to extract confessions,” Adams said, “Legal recourse is more or less fruitless: If a prosecutor really wants you held because he thinks he can extract a confession, then people often give in.” Adams added that there is no existing data or means to know how often innocent people plead guilty.


What happens next?

Ghosn has denied the accusations and says the charges brought against him are motivated by a desire among some Nissan executives for a boardroom coup.

Nissan’s statement on Wednesday suggested the automaker would not let up in its campaign against Ghosn, saying it “reserves the right to pursue separate legal action over groundless and defamatory remarks” made during a press conference he held following his flight from Japan. A spokesman for Ghosn has accused Nissan of “trying to create a diversion ahead of its worst results since 2009.”

Ghosn remains in his childhood home country of Lebanon, where he hopes to have his case heard. Lebanese judicial authorities have said they will not extradite Ghosn to Japan and have banned him from traveling outside the country. Though Ghosn has said he will abide by the travel ban, his accusers in Japan will be hoping Lebanon is keeping an eye on its airport scanners.

Correction, Feb. 13, 2020: The image above depicts Carlos Ghosn addressing a crowd of journalists in Beirut. A previous version of this article misstated where the photo was taken.

Colm Quinn is the newsletter writer at Foreign Policy. Twitter: @colmfquinn

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