See More on Facebook

Culture and society, Current affairs

Feature: Ghosn’s fall from grace

Ghosn legacy torn apart as prosecutors struggle to build a solid case.


Written by

Updated: December 16, 2018

On the morning of Dec. 4, about 300 people attended a meeting at Nissan Hall at the headquarters of Nissan Motor Co. in Yokohama. The attendees were representatives and sales reps from about 120 Nissan distributors and dealers.

At the meeting’s onset, Nissan President and Chief Executive Officer Hiroto Saikawa suddenly began his address.

“He completely managed the company for his own benefit and abused it for his personal purposes,” Saikawa said. “This is totally unacceptable.”

Saikawa launched a stinging attack on former Nissan Chairman Carlos Ghosn, and his pent-up emotions were laid bare in front of attendees. “The company has been heavily damaged. This isn’t something that can easily be healed,” he said. “My mission is to erase the perception that ‘Ghosn is Nissan and Nissan is Ghosn’ and to move our company forward.”

Saikawa’s speech was met with thunderous applause from attendees.

The back-and-forth between Ghosn and the special investigation squad of the Tokyo District Public Prosecutors Office rumbles on at the Tokyo Detention House in Kosuge, Tokyo.

Ghosn has been arrested and indicted on suspicion of understating his annual executive remuneration of about ¥2 billion in securities reports for several years in a bid to dodge criticism from within Japan and overseas about the huge amount of his income. Ghosn reportedly planned to receive the unreported portion in the form of future payments after he stepped down.

The investigation squad has obtained large volumes of evidence from the Nissan side through the Japanese version of the plea-bargaining system. Among them there are memorandums that stated, to the yen, Ghosn’s actual annual remuneration (about ¥2 billion), how much he had received (about ¥1 billion) and how much had been deferred and would be received later (about ¥1 billion).

There are also tables, in which these figures were summarized and included details such as cumulative amounts, and other documents, which specified the plan for how Ghosn would actually receive the deferred payments. Ghosn’s signature remained on some of these documents, and there were markings indicating Ghosn himself had made corrections and modifications with a fountain pen.

The 59-year-old head of Nissan’s secretarial office, who had served Ghosn for more than 10 years and reached a plea bargain with prosecutors, kept these documents in a safe. “The fact several kinds of documents were drawn up and methods for how the money would be received were seriously considered is, in itself, proof that the amount of Ghosn’s remuneration had been finalized,” a senior prosecutor told The Yomiuri Shimbun.

Ghosn, 64, has no intention of backing down. He insists the figures written on the memos were “nothing more than a suggested amount reflecting my own value,” and that his signature and the corrections “showed only that I had seen the documents, but did not mean the remuneration amount had been finalized.”

Did Nissan suffer loss?

Ghosn’s lawyers are zeroing in on “the method for deciding executive remuneration,” which Nissan releases in the securities reports.

The report says the amount of remuneration for each Nissan director is determined after being discussed “with the representative directors and approved by the chairman.” The English version of the report states “directors” in the plural.

The lawyer insisted Ghosn, who was the chairman, discussed his own remuneration only with former Representative Director Greg Kelly, and that there is no indication the other representative director, Saikawa, was aware of the figures stipulated in the memos.

“It’s unthinkable that a future Nissan CEO would approve payment of remuneration that violated the rules, which backs up the argument that Ghosn’s pay wasn’t finalized,” the lawyer said.

A major headache for Nissan is the viewpoint that Ghosn was arrested on suspicion of violating adjective law, which means he did not create any actual loss for Nissan.

There is no penalty simply for receiving a huge income. Ghosn actually received no more than a portion of his remuneration, and Nissan had not set aside the chunk that was to be paid later. Even among prosecutors, there is a belief that “unless this is handled as a violation of substantive law that created an actual loss for Nissan, the case won’t hold up.”

There are also suspicions Ghosn misappropriated Nissan’s funds for personal use, such as by using a Dutch subsidiary, Zi-A Capital BV, to buy luxury homes. When Nissan provided information on this to the investigation squad, it initially believed these suspicions would lead to the pursuit of Ghosn’s criminal responsibility for special breach of trust under the Companies Law and professional embezzlement.

However, much of the alleged wrongdoing occurred overseas, and Ghosn has denied the allegations. A lawyer who was previously a prosecutor said: “Evidence that Nissan suffered a loss will be essential for building a case of a special breach of trust. There are many high hurdles to doing this, including how to appraise the value of overseas property assets.”

A coup d’etat?

Day after day, high-end vehicles bearing blue number plates — indicating the car is for foreign diplomats — pull into the Tokyo Detention House. These diplomats are from Brazil, Lebanon and France. Ambassadors and other officials from these nations have been meeting with Ghosn, who holds all three nationalities. On Nov. 28, a Lebanese Embassy official who had met with Ghosn caused a scene when they proclaimed to the waiting media horde, “Innocent!”

Nissan has also been indicted as a corporation in connection with the understating of executive remuneration. In court, Nissan’s governance shortcomings will be strictly questioned, and Saikawa, 65, bears a big responsibility for this.

In Japan and overseas, there have been swirling claims that the arrest of Ghosn was “a coup d’etat by a Nissan-originated circle.” A source at the automaker admitted, “If this incident ends like this, it would be a painful result for the company. I hope it can somehow be handled as a violation of substantive law.”

The language used by a Nissan executive was even more blunt. “If the investigation ends halfway while we’re getting criticized with comments like this is a ‘Nissan conspiracy’ and some people think maybe Ghosn wasn’t all that bad, we won’t be able to move forward.”

About three weeks have passed since Nissan’s charismatic boss was arrested. The world is closely watching how the investigation will pan out.Speech



Enjoyed this story? Share it.


The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Culture and society, Current affairs

Opinion: Japan must return to being South-east Asia’s top trade partner

Singapore’s Ambassador-at-Large Tommy Koh called on Japan to return to Asean as its top investor, as it was in the 1970s and 1980s. Veteran diplomats jousted at a public forum here over the question of whether Japan is sufficiently invested in South-east Asia, amid the former’s concerns about China’s growing influence in the region. Singapore’s Ambassador-at-Large Tommy Koh called on Japan to return to Asean as its top investor, as it was in the 1970s and 1980s. “You were Asean’s number one trade partner. Now you are number four. You were also number one in foreign direct investments. Now you are not. You have lost so much ground in South-east Asia,” he said.


By The Straits Times
March 20, 2019

Culture and society, Current affairs

Duterte to deport any ICC official investigating his rights record

Many have called on the International Criminal Court to investigate Duterte’s deadly drug war. International Criminal Court (ICC) prosecutors will be denied entry and deported if they try to enter the Philippines to investigate President Rodrigo Duterte for crimes against humanity, Malacañang said on Monday. “Certainly we will not allow any attempt at interfering with the sovereignty of this country,” presidential spokesperson Salvador Panelo told reporters a day after the Philippines’ withdrawal from the ICC became official. The President withdrew the Philippines from the world’s only permanent war crimes tribunal last year after ICC Prosecutor Fatou Bensouda announced that she had opened a preliminary examination of information brought against the Philippine leader about thousands of extrajudicial killings in his brutal war on drugs. Investigation can go on


By Philippine Daily Inquirer
March 19, 2019

Culture and society, Current affairs

Flooding death toll climbs to 50 in Indonesia

Aid agencies say evacuees in ‘urgent’ need of help. As of Sunday afternoon, at least 50 people were reported killed and 273 families had been left homeless following a flash flood in Jayapura regency, Papua. The flash flood occurred after heavy downpours in the area from Saturday afternoon to the early hours of Sunday. Jayapura Regent Matius Awoitauw told The Jakarta Post on Sunday that the survivors were in “urgent need” of emergency aid such as food and medication and facilities for burying the dead. Currently, 200 people are taking refuge at his residence while 1,400 others are sheltering in nearby schools. Dead bodies are being taken to hospitals in the region for identification purposes. He added that the regional government was working with the National Police and the Indonesian Military to record and evacuate any other residents from the area while building publi


By The Jakarta Post
March 19, 2019

Culture and society, Current affairs

South Korea says punishing women for abortion unconstitutional

The decision was made by the country’s National Human Rights Commission. The National Human Rights Commission of Korea has delivered its opinion to the Constitutional Court that criminal penalties for women who undergo abortion, as well as doctors who perform them, are unconstitutional. The current law on abortion violates the right to self-determination, among others, the rights panel said Monday. Marking the first time the rights panel has ever expressed an official position on the highly volatile issue, it sent its statement to the court last week ahead of next month’s ruling on the constitutionality of the nation’s abortion laws.


By The Korea Herald
March 19, 2019

Culture and society, Current affairs

The Pakistani victims of the New Zealand terror attacks

Remembering the Pakistani victims of the terror attacks. Nine Pakistanis were among the 49 victims of a terror attackon two mosques that rattled the otherwise serene New Zealand city of Christchurch on Friday. Six of the deaths were confirmed on Saturday while three more were confirmed on Sunday. Below is a compilation of all the facts so far known about the nine Pakistani victims: Naeem Rashid


By Dawn
March 18, 2019

Culture and society, Current affairs

At least 49 killed in terror attacks on Christchurch mosques

Many worshipers from Southeast Asia were present at the mosque at the time of the shooting. At least forty-nine people were killed and dozens injured in shootings at two mosques in New Zealand’s second-largest city of Christchurch on Friday (March 15) in what Prime Minister Jacinda Ardern said was a well-planned terror attack, forcing the government to place the country on its highest security threat level, the Straits Times reported.  Police said all mosques in the country have been asked to close their doors. Christchurch was also initially placed under lockdown. Ms Ardern said Friday was “one of New Zealand’s darkest days”. “This can only be described as a terrorist attack,” Ms Ardern sai


By ANN Members
March 15, 2019