Car­los Ghosn v. Ja­pan

The for­mer Nis­san leader is en­snared in a le­gal night­mare

Pittsburgh Post-Gazette - - Weekend Perspectives - Lisa Du, Kaye Wig­gins and Is­abel Reynolds are re­porters for Bloomberg News.

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.

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