Carlos Ghosn -The Great Escape
January 10, 2020 | Expert Insights
Scripted like a Hollywood movie, the escape of former Nissan CEO Carlos Ghosn from Japanese law has captivated the world. Is he a plain fugitive or does the Japanese legal system warrant closer international scrutiny?
At 4 AM on 30 Dec 2019, Carlos Ghosn landed in a private jet in Beirut, Lebanon and made a short public statement, “I have escaped injustice and political persecution (from Japan).”
Carlos Ghosn, the Chairman and CEO of Nissan-Renault – Mitsubishi strategic alliance was arrested in Nov 2018 by the Japanese Public Prosecutor, on multiple charges of financial impropriety and was on bail, awaiting trial. The Prosecutor had raised four charges against him, including under-reporting his Nissan salary and transferring personal losses to the company’s books. However, Carlos had denied all charges.
How was the Escape Organized?
While the exact details of Carlos Ghosn’s escape have not been made public, social media have pieced together the likely escape plan. In April 2019 the car-maker was granted bail, on payment of surety of one billion Yen (US$ 8.9 million). Under the terms of bail, Carlos was not permitted to leave Japan, his house was placed under 24-hour camera surveillance and his use of technology (use of internet and speaking to wife Carole) was severely restricted. However, surprisingly, he was not required to wear any surveillance tags. The escape plan was probably planned and executed by a group of security experts, comprising former military professionals. Then in Dec 2019, a group of musicians were invited to play at Carlos’s home in Tokyo and the experts were disguised amongst the group. At the end of the musical performance, Carlos Ghosn made his escape with the band, hidden in a large musical instrument case. The band was transported to Tokyo Airport, from where they were flown in a Bombardier Challenger Private jet to Beirut; with a refuelling halt, at Istanbul. Carlos Ghosn holds French, Brazilian and Lebanese passports and he is reported to have cleared Lebanon’s immigration, with his French passport and Lebanese ID. It is pertinent to note that Lebanon and Japan, have no extradition treaty.
Assessment
With the escape of the suspect from Japanese custody, the conduct of the high-profile trial is now uncertain. The office of the Public Prosecutor should also be embarrassed that the celebrity-suspect escaped Japanese custody, with impunity. However, perhaps the more important consequence will be the revival of global criticism of the infamous Japanese ‘hostage – justice’ system.
What is ‘Hostage Justice’?
In most developed countries, for non-violent crimes, suspects can be held for a maximum 24 hours, without being charged. However, the Japanese criminal procedure code permits detentions of up to 23 days! Further, bail is often refused and suspects subjected to interrogation, without the presence of a lawyer. In Japan, it is also common to extend the detention of suspects in custody, by adding new charges. Thus, in the case of Carlos Ghosn, he was detained for 108 days before he was released on bail, in March 2019; only to be re-arrested and then released again.
In another statement, made after his escape, Carlos Ghosn has said he would no longer be held hostage by a rigged Japanese justice system, where guilt is presumed, discrimination rampant and basic human rights denied.
Assessment
Extended periods of pre-trial incarcerations, enable law enforcement officials to subject suspects to prolonged interrogations, without the presence of defence lawyers. In such circumstances, suspects feel coerced to confess; sometimes, even for crimes, they did not commit. According to Japanese Human Rights activists, an astonishing 99.9% of criminal defendants are convicted!
Is Japanese Nationalism Playing an Under-hand Role?
The Renault (French) – Nissan (Japanese) alliance was formed in 1999 when Renault rescued Nissan from the brink of bankruptcy. As a result, the French company acquired a 43% stake in Nissan, while the Japanese company got a 15% stake in Renault. In 2016, Mitsubishi was added to the mix, when Nissan acquired a 34% stake in the fellow Japanese concern. Since then, Mitsubishi has recovered from both scandal (faking emission data in 2016) and financial woes. During this entire period, Carlos Ghosn was the center stage; initially as Chairman and Chief Executive of Renault and later becoming Chairman of Nissan and then Mitsubishi, as well. After the three-company alliance was formed in September 2017, a separate board was formed and Carlos Ghosn was made Chairman and Chief Executive.
Though the three companies retain their own identities, they also act as a global car grouping. The three companies develop and use common technologies and buy parts from the same global suppliers. Since his elevation in 1999, Carlos Ghosn applied bold and effective strategies, in turning around all three global automobile companies. He was ruthless in cutting jobs, closing down factories and transforming operating philosophies; earning him the French nick-name, ‘Le-Cost Killer’. Though Carlos Ghosn reportedly does not like the moniker, under his dynamic leadership operating profits soared and remained high; until, global financial crisis, when like other manufacturers, profits began to plummet.
Ghosn has claimed that his arrest was part of a plot, to remove him from the automotive empire he built.
Assessment
The Renault – Nissan – Mitsubishi Alliance, is not a merger; the alliance permits the constituting companies to retain individual identity. However, in forging the alliance, Carlos Ghosn created a competitive advantage that benefitted both individual companies and the alliance as a whole. Now that Nissan and Mitsubishi have returned to profitability there may be apprehension amongst nationalist elements that Japanese companies were being undermined by the French - Renault. It is possible that these elements would like to stymie any further attempts towards merger; and, for which Carlos Ghosn would be an irreplaceable key. Essentially, the idea of former Japanese automotive champions (Nissan and Mitsubishi) working under the French flag (Renault), is implacable to Japanese nationalist sentiment.
Assessment
For two decades, Carlos Ghosn provided leadership to three global car manufacturing companies, making them individually profitable and wielding them into the largest light vehicle manufacturing alliance, in the world. Carlos Ghosn will remain an iconic global corporate leader and there is much the automobile industry can learn from his leadership, management style and strategic decision-making. In terms of individual achievement, Carlos Ghosn stands on the same mantle as Lee Iacocca, the iconic car-manufacturer whose singular achievements in Ford and Chrysler, between 1960 to 1980, remain a legend.
However, by jumping bail and escaping from Japanese law, Carlos Ghosn also remains a fugitive. By taking advantage of the complex international extradition system, he may also escape trial in Japan. However, if Carlos refuses to confront his accusers, he stands accused with other criminals, of escaping the arms of sovereign law, to avoid being held accountable. In India we have little respect for Vijay Malaya and Nirav Modi, who like Carlos Ghosn deliberately escaped sovereign jurisdiction, to avoid trial.
Japan is a proud nation and there is much the world can emulate from Japanese culture and values. However, the concept of ‘hostage justice’, is out of sync with criminal-justice systems, in the developed world. Detention and interrogation without oversight are shortcomings that deserve to be corrected, in the office of public prosecution. By incorporating these provisions in Japanese Law, not only would the criminal justice system be improved, it would remove any moral justification for Carlos Ghosn, not returning to Japan and standing trial.
Authored by Major General Moni Chandi (retd)
Image Courtesy: dw.com