Carlos Ghosn v. Japan
The former Nissan leader is ensnared in a legal nightmare
For months, Carlos Ghosn, the deposed chairman of Nissan Motor Co., has been caught up in the peculiarities of Japan’s criminal justice system. A suspect can be held for questioning for up to 20 days without charge after initial arrest — far longer than in most other developed countries. The suspect is allowed to seek bail only after being indicted and, even then, the person can be immediately re-arrested for questioning on suspicion of new charges. That restarts the 20-day clock, which is a very common practice. A judge has to approve every extension but almost always does, and the cycle can go on indefinitely. Legal experts say this is all a strategy to secure a confession and make a trial easier. In 2017, less than 1 percent of cases in Japan’s district and county courts resulted in an acquittal or the defendant’s release. Critics question whether the system has sufficient safeguards to protect human rights.
1. Why was Mr. Ghosn arrested? Initially, it was on suspicion of falsifying his salary from Nissan by tens of millions of dollars in company filings to regulators. He was later indicted on that charge for the five fiscal years through March 2015. A subsequent indictment covered the three subsequent years, bringing the total allegedly unreported to $80 million. Those charges were related to a relatively arcane accounting point: whether retirement payments were properly booked. Under Japanese law, listed companies must disclose directors’ compensation if they make more than 100 million yen ($900,000), said Kenichi Kinukawa, a former Tokyo prosecuting attorney who’s now a lawyer in the London office of TMI Associates.
2. Is there more coming? Mr. Ghosn, 64, is being investigated on a potentially more serious charge of aggravated breach of trust for allegedly trying to transfer millions of dollars in personal trading losses to Nissan from 2008 to 2012. Nissan also has accused Mr. Ghosn of misusing company funds, including for the purchase of homes from Brazil to Lebanon and for hiring his sister on an advisory contract. It said Jan. 8 that its probe is continuing to broaden. Those allegations aren’t part of the criminal case but could be added if prosecutors decide it’s warranted.
3. What does Mr. Ghosn say? “I have been wrongly accused and unfairly detained based on merit-less and unsubstantiated accusations,” Mr. Ghosn told a Tokyo court Jan. 8. He rejected charges that he failed to disclose income from Nissan and said the company took on his swap contracts temporarily, with board approval and without incurring a loss. His lawyers have said the Securities and Exchange Surveillance Commission looked into the case in 2008 and didn’t file criminal charges. A Saudi partner of Nissan has also come to Mr. Ghosn’s defense. The length of his detention (he was arrested Nov. 19) and the lack of clarity surrounding the case have drawn criticism from abroad.
4. What’s so unusual about Japan’s legal system? Japan’s postwar criminal justice system is based largely on continental European law, with some characteristics of the Anglo-American system. Some researchers see it as focused more on a just result than due process. Prosecutors in Japan routinely arrest suspects on suspicion of relatively minor charges, hold them for questioning and add charges as they go. Critics say lengthy detentions and interrogations with limited access to an attorney can lead to false confessions, such as the recent case of a woman released after 20 years in jail. The U.N. Committee Against Torture has expressed concerns. Amnesty International said in 2017 that it had “raised concerns about the lack of rules or regulations regarding interrogations” during pre-trial detentions. The Japan Federation of Bar Associations has called for reforms, including recording of interrogations. In response, the Japanese government has noted its system requires “strict judicial reviews at each stage” to balance the human rights of suspects with the needs of investigators.
5. Could Mr. Ghosn be released on bail? Presiding Judge Yuichi Tada said Jan. 8 that Mr. Ghosn is being detained because of flight risk and the risk of witness tampering. He can apply for bail once his detention period ends, but only about 30 percent of such applications succeed, lawyers say. If he doesn’t get bail just after the indictment, he may get it after the first day of the trial or after important witnesses are heard. Often, defendants who fight the charges are refused bail on the grounds that they may destroy evidence, said Yuichi Kaido, part of a group at the Japan Federation of Bar Associations working on the issue. Mr. Ghosn’s chief lawyer, Motonari Otsuru, said it might take at least six months for the case to go to trial, assuming it does, and that Mr. Ghosn could be held without bail during that time. If bail is denied, the defense would appeal to a higher court, he said.
6. What punishment could Mr. Ghosn face? Both filing a false statement to regulators and breach of trust carry a potential sentence of 10 years of imprisonment and a maximum fine of 10 million yen. Prosecutors could combine some of the charges into one or keep them separate. Mr. Ghosn’s case will likely be handled by a panel of three judges because juries are convened only for certain types of cases, such as murder or manslaughter. The average duration for threejudge trials is a little over 13 months.
7. Who else is charged? Nissan also has been indicted for under-reporting Mr. Ghosn’s income. The maximum penalty for the company is a fine of 700 million yen, according to TMI Associates’ Mr. Kinukawa. The company said it would strengthen its corporate governance and compliance and file amended financial statements once it has finalized the corrections. Former Nissan executive Greg Kelly — known as Mr. Ghosn’s gatekeeper and confidante — was indicted for allegedly helping him under-report income but released on bail Dec. 25. Mr. Kelly has denied the allegations through a lawyer.
8. Where’s Mr. Ghosn been? He’s been held at a 12story detention house in northern Tokyo where daily life for detainees begins at 7 a.m. and lights go out at 9 p.m., according to an archived and undated pamphlet from the ministry. There are three meals a day, including rice, sides of meat and vegetables, and soup. Lawyer Otsuru said Jan. 8 that Mr. Ghosn was moved to a larger room with a Western-style bed, compared to when he was initially incarcerated. He said his client had been interrogated by an Englishspeaking prosecutor and also has a translator, with recordings made on Bluray. The detention house is also where Japan executes some of its prisoners on death row. In July 2018, the leader of the Aum Shinrikyo doomsday cult — the group that carried out a deadly sarin gas attack on the Tokyo metro in 1995 — was executed.