How Did Ghosn Escape Japan? What Is The Ghosn Scandal?
Business
“To what extent did he organize his companies to deliberately bend the rules and get richer? I haven’t seen the proof… On the other hand, was this a high-level conspiracy?”
-Le Figaro Journalist
Carlos Ghosn is a Brazilian-Lebanese businessman who is best known for his tenure as the CEO of Nissan & Renault. Moreover considered one of the most successful automotive executives of the 21st century, having overseen a period of growth and expansion.
Ghosn began his career in the automotive industry at Michelin in France, where he worked for over a decade after graduating school. In 1996, he was recruited by Renault to become their executive vice president of finance and development. Under his leadership, Renault was able to turn a profit and achieve significant growth. Ghosn enacted a plan to fire 20,000 workers and shut down 5 unnecessary factories. Cost-cutting measures other executives were nervous to enact. However, measures that proved very profitable!
In 1999, Renault formed a partnership with Nissan, which was in financial trouble at the time.
Ghosn was appointed as the CEO of Nissan, and he quickly implemented a cost-cutting plan that resulted in the company becoming profitable again.
In 2005, Ghosn received the appointment as the CEO of Renault-Nissan Alliance. Which was a strategic partnership between Renault and Nissan. Under his leadership, the alliance became one of the largest and most successful automotive partnerships in the world, with the companies sharing technology, engineering, and manufacturing resources. Ghosn also played a key role in the development of electric vehicles, and under his leadership Nissan introduced the LEAF, which became the world’s best-selling electric car.
However, Ghosn started to encounter problems. Nissan’s performance began to flounder and as a result; Ghosn’s ‘untouchable’ image started to fade. As Harvard Business Review pointed out:
“Was Ghosn stretched too thin, running two global companies eight time zones apart? Was anyone pushing back on his decisions? And after two decades leading the Japanese and French automakers, what was Ghosn’s succession plan?”
Then on November 9th, 2018, after stepping off his corporate jet, Ghosn was arrested in Japan on charges of financial misconduct. Charges that included underreporting his income and misusing company funds. Specifically, prosecutors believed Ghosn earned $88 million from 2011 to 2015 yet reported only half.
The arrest absolutely shocked the global corporate world.
CEOs of multinational conglomerates don’t often find themselves taken into custody. Ghosn denied the charges and released a public statement following the arrest claiming that he, “acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company with the sole purpose of supporting and strengthening Nissan.”
Ghosn claimed that the charges were the result of a conspiracy by Nissan executives who wanted to prevent him from further integrating the company with Renault. Nissan’s then-CEO Hiroto Saikawa, accused Ghosn of “significant acts of misconduct” in a press conference immediately following the arrest.
Ghosn was subsequently removed from his position at Nissan and Renault. On March 4th, 2019 Ghosn’s judge agreed to release him on bail.
Ghosn lives under house arrest in Tokyo for almost a year, before carefully planning and executing his escape to Lebanon.
On December 29th, 2019 Ghosn would meet two individuals near his hotel.
Evading extremely heavy Japanese police surveillance. At the hotel the two men would load Ghosn into a music box which would serve as his ‘getaway’.
In addition, one of the key factors in Ghosn’s escape was his access to a private jet. His handlers would be able to load the box onto the plane without Japanese authorities suspecting anything.
The box, which labeled as “audio equipment,” was large enough to conceal Ghosn’s entire body. The authorities did not search the box prior to takeoff.
Ghosn said of the box: “The 30 minutes waiting in the box on the plane, waiting for it to take off, was probably the longest wait I’ve ever experienced in my life.”
In addition, Ghosn said: “When you get in the box, you don’t think about the past, you don’t think about the future, you just think about the moment. You’re not afraid, you don’t have any emotion except the huge concentration on ‘this is your chance, you can’t miss it. If you miss it, you’re going to pay with your life, with the life of a hostage in Japan’.”
Ghosn reportedly worked with a team of private security experts, who helped him evade detection and navigate the legal and logistical challenges of his escape. A father and son team Michael Taylor and his son Peter Taylor who recently fought a months-long battle to avoid their own extradition from the US to Japan over the case.
Tokyo Prosecutors released a statement saying the pair received $1.3m to help Ghosn escape Japan on 29 December, 2019.
Michael Taylor, 60-year-old private security specialist and US Army Special Forces veteran ran the American International Security Corporation, the private military contractor focusing on helping clients escape extremely difficult situations around the world. Moreover, a profile in Vanity Fair, claimed Taylor has completed nearly two dozen escape operations, charging clients anywhere from $20,000 to $2million per hire.
Ghosn’s escape from Japan caused a major international incident. With authorities in both Japan and Lebanon (where Ghosn fled) launching investigations into the matter.
Furthermore, Ghosn has since claimed that he was the victim of a “coup” orchestrated by Nissan executives and the Japanese government. And that he became forced to flee in order to avoid an unfair trial.
Ghosn believes he was the subject of a conspiracy.
One born in Japan fearful of a Renault takeover of the Japanese titan Nissan. Too much national pride was at stake in Japan in Ghosn’s view. And as a result he couldn’t simply be fired, he had to be ‘eliminated’. Otherwise he would have remained CEO of Renault which still owned 43% of Nissan. And could attempt a hostile takeover. Ghosn said: “Some of my Japanese friends thought that the only way to get rid of the influence of Renault on Nissan, was to get rid of me,”
By having Ghosn arrested he was silenced and neutralized. And in Japan becoming arrested is essentially the end of the line when you consider the national 99.4% conviction rate. Ghosn was looking at terrible odds of enjoying freedom again.
Furthermore the Tokyo prosecutor’s office worked hard to force a confession from Ghosn. A confession that never emerged. Ghosn would later say at a press conference: “‘It will get worse for you if you don’t just confess,’ the prosecutor told me repeatedly.”
In fact a United Nations human rights panel even ruled against the Japanese treatment and felt that Japan committed an “extrajudicial abuse of process” by arresting ex-Nissan CEO Carlos Ghosn multiple times to keep him in jail for months.
Furthermore the UN panel felt that it became “fundamentally unfair” for Japanese prosecutors to arrest Ghosn on four separate occasions. So that they could jail him for a total of 129 days in late 2018 and early 2019. In addition, Ghosn’s lawyers claimed that he became subjected to harsh conditions. Such as solitary confinement and a lack of heating in his cell.
On the other hand, prosecutors in Tokyo released a statement saying:
“Ghosn’s allegations completely ignore his own conduct, and his one-sided criticism of the Japanese criminal justice system is totally unacceptable.”
When Ghosn landed in Lebanon where he could evade Japanese & French authorities’ extradition, he told reporters that, “I did not escape justice.”I fled injustice.”
Written by Avhan Misra
Business
How Did Ghosn Escape Japan? What Is The Ghosn Scandal?
cover image source: Achtergrond: de ondergang van Carlos Ghosn – AutoRAI.nl
