GHOSN CASE RAT­TLES JA­PAN’S EX­PAT BUSI­NESS COM­MU­NITY

Some be­lieve the French Brazil­ianLe­banese ty­coon, has been the vic­tim of harsh­ness be­cause he is a for­eigner

Financial Chronicle - - MISCELLANY - ANNE BEADE & HIROSHI HIYAMA

CAR­LOS Ghosn's pro­longed de­ten­tion un­der what crit­ics see as Ja­pan's opaque and dra­co­nian le­gal sys­tem has alarmed for­eign ex­ec­u­tives and sparked ques­tions over the coun­try's abil­ity to at­tract over­seas talent.

Some in the ex­pat busi­ness com­mu­nity be­lieve the FrenchBrazil­ian-Le­banese ty­coon, the once-revered chair­man of Nis­san, has been the vic­tim of un­fair harsh­ness be­cause he is a for­eigner. "The way Mr. Ghosn is treated seems com­pletely out of pro­por­tion com­pared to the way Ja­panese ex­ec­u­tives are treated," said one Tokyo-based French busi­nessper­son, who asked not to be named.

This busi­nessper­son pointed to a se­ries of mas­sive ac­count­ing scan­dals at Toshiba dur­ing which Ja­panese ex­ec­u­tives avoided crim­i­nal charges.

In con­trast, Ghosn has lan­guished in a Tokyo de­ten­tion cen­tre for more than 50 days as he fights a string of al­le­ga­tions of fi­nan­cial mis­con­duct. The court has banned his fam­ily from vis­it­ing, al­low­ing only con­tact with his lawyers and diplo­mats.

"It gives the im­pres­sion of dou­ble stan­dards, as if (Ghosn) was be­ing treated this way be­cause he is a for­eigner. I do not see how they are go­ing to at­tract qual­i­fied for­eign­ers," the per­son told AFP.

"Ghosn was an icon, a sym­bol of French suc­cess and this has poured cold wa­ter on quite a few am­bi­tions from young trainees — at least those train­ing for ca­reers in busi­ness and man­age­ment."

The de­tained ex­ec­u­tive was ini­tially kept in a tiny room with Ja­panese-style tatami for sleep­ing -- spark­ing out­rage from abroad.

He has now been moved to a larger room and has a Western­style bed, ac­cord­ing to his lawyer Mo­tonari Ot­suru.

But even Ot­suru has damp­ened ex­pec­ta­tions his client could be re­leased any time soon, sug­gest­ing it could be six months un­til a trial and stress­ing that bail is un­likely in such cases.

Many in Ja­pan have voiced sur­prise that for­eign­ers have crit­i­cised their le­gal sys­tem and prose­cu­tors have re­acted an­grily, say­ing they are play­ing by the rules in place.

"This is a spe­cific case," said Seiji Nakata, head of Daiwa Se­cu­ri­ties. "I am in con­tact with for­eign bosses and they have not voiced any pes­simism on the sub­ject".

But Ghosn dominates talk in ex­pat busi­ness cir­cles and while for­eign in­vestors are not yet rush­ing to leave Tokyo, the case has wor­ried ex­ec­u­tives who fear they may un­know­ingly face le­gal trou­bles even if they think they are op­er­at­ing legally.

"Mr. Ghosn's case has shone a strong spot­light on the opaque­ness of Ja­pan's pros­e­cu­tion sys­tem," said Martin Schulz, econ­o­mist at the Fu­jitsu Re­search In­sti­tute in Tokyo.

"This cer­tainly has a neg­a­tive ef­fect on the abil­ity of com­pa­nies to at­tract top talent to Ja­pan," Schulz told AFP.

As the Ghosn case has laid bare, Ja­pan's le­gal sys­tem gives enor­mous power to prose­cu­tors, who nearly al­ways se­cure guilty ver­dicts. Courts rou­tinely al­low sus­pects to be held for ques­tion­ing for lengthy pe­ri­ods, and many ma­jor me­dia out­lets are largely sup­port­ive of the au­thor­i­ties.

"Peo­ple are wor­ried. It cre­ates a le­gal un­cer­tainty on the busi­ness con­di­tions in Ja­pan," said an­other Tokyo-based source with close ties to for­eign firms.

"See­ing how the sys­tem works, and how it is or­ches­trated in the me­dia, cre­ates anx­i­ety among busi­ness lead­ers, an un­easy feel­ing," the per­son said.

Ghosn's case has also high­lighted how the Ja­panese sys­tem dif­fers from western busi­ness norms, said cor­po­rate com­pli­ance lawyer Nobuo Go­hara, also a for­mer Tokyo pros­e­cu­tor.

Go­hara noted that Nis­san's sit­ting Chief Ex­ec­u­tive Of­fi­cer Hiroto Saikawa did not give Ghosn the op­por­tu­nity to de­fend him­self in­ter­nally to the com­pany's board. In­stead, the Nis­san man­age­ment con­ducted an in­ter­nal probe, sided with prose­cu­tors and swiftly sacked Ghosn af­ter his ar­rest.

"Peo­ple see what kind of case this is, and what kind of treat­ment Mr. Ghosn has re­ceived so far," Go­hara told AFP.

"If you were a man­ager with a very high salary in Ja­pan -- and be­cause of your com­pen­sa­tion, you might find your­self in a sit­u­a­tion like that -- I would imag­ine peo­ple with nor­mal, com­mon sense would not want to work in Ja­pan," he said.

"You would be too scared."

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