Ghosn Flees to Lebanon to Escape ‘Rigged’ Japan Legal System

(Bloomberg) -- Carlos Ghosn, the fallen automotive titan facing trial for financial crimes, fled to Lebanon to escape what he called Japan’s “rigged” justice system.

The dramatic exit followed Ghosn’s equally dramatic arrest just over a year ago in Tokyo on charges of financial misconduct. Lebanon, where the former head of Nissan Motor Co. and Renault SA grew up and has citizenship, provides legal protection against extradition.

“I have not fled justice,” Ghosn said in an emailed statement Tuesday. “I have escaped injustice and political persecution.” How he got to Lebanon is unclear: Ghosn’s lawyer says all his passports were confiscated and he was under constant surveillance. Lebanese media reported that he arrived on a private jet from Turkey, and the newspaper Annahar cited caretaker State Minister Salim Jreissati as saying the executive entered with a French passport.

The 65-year-old says he’s the victim of a conspiracy among Nissan executives, prosecutors and government officials to prevent him from further integrating the company with Renault. He was to be tried for what prosecutors and his former colleagues at Nissan called a pervasive pattern of financial misconduct and raiding of corporate resources for personal gain. Ghosn denies those allegations.

Ghosn’s strict bail terms were designed to prevent him from absconding. He couldn’t spend more than one night away from his house without a judge’s permission. A video camera was trained on his front door, and at the end of each month, Ghosn was required to provide a list of everyone he’d met.

Other than a one-hour video conference in November and another over Christmas, Ghosn wasn’t allowed to see or speak to his wife, Carole. She told Bloomberg Television last month that Ghosn should face trial in France. The executive has French, Brazilian and Lebanese citizenship.

“Ghosn has turned into a fugitive from a suspect,” said Koji Endo, an analyst at SBI Securities Co. in Tokyo. He’ll “probably never return to Japan,” and if he did, he would be arrested immediately.

Ghosn’s attorney, Junichiro Hironaka, said in televised comments that the first he heard of his client’s escape was the TV news. No one answered the phone at the Tokyo Prosecutor’s Office, the Tokyo District Court or the Immigration Bureau of Japan, and nobody was available to comment at the office of Prime Minister Shinzo Abe. The Foreign Ministry declined to comment, and a Nissan representative said the company had no comment. Japan has a national holiday starting Tuesday through the end of the week.

“I am very surprised,” French Junior Economy Minister Agnes Pannier-Runacher told France Inter radio. Later, in an interview with BFM TV, she said Ghosn “is not above the law.” The office of the president declined to comment on the matter, and other officials weren’t immediately available for comment.

Tough System

Beating a criminal charge in Japan is almost impossible. Courts there have a conviction rate close to 100%, as Japanese prosecutors can wield a range of procedural advantages unavailable to their counterparts in Western systems. In many cases, the prosecution can introduce evidence obtained without a proper warrant.

Japanese prosecutors and the U.S. Securities and Exchange Commission both claim Ghosn and Nissan violated pay-disclosure rules, receiving $140 million more compensation than the company reported to shareholders.

The executive also faces breach-of-trust charges related to transactions that transferred personal investment losses to Nissan, and that moved money from a dealership in Oman into a company he controls in Lebanon.

Ghosn, a globetrotter who for years was a fixture at events for the rich and famous — including the World Economic Forum in Davos, Switzerland — was released on bail in April on condition that he lived at a registered address and not leave Japan. The executive was tailed by unmarked sedans around Tokyo. At parks or in restaurants, he’d be followed on foot.

Ghosn was born in Brazil and raised in Lebanon, where he has investments in real estate and vineyards and continues to be viewed as a business icon. His image has appeared on national postage stamps, and within days of his arrest, a billboard with his portrait loomed over the streets leading to downtown Beirut. “We are all Carlos Ghosn,” it read. The executive’s incarceration united the country’s usually fractious politicians around him.

Lebanon’s ambassador to Japan bought a mattress for Ghosn’s cell in December 2018 and pushed to have him moved from solitary confinement. Hady Hachem, the chief of cabinet of the minister of foreign affairs, said at the time that the government was also demanding that its citizen be allowed to contact his family and was making sure he had proper legal representation.

At Ghosn’s house in an affluent Beirut neighborhood on Tuesday, there were no security guards present and the windows were open. A shop owner across the street said he didn’t think Ghosn was there, adding he didn’t know what had happened until he saw photographers outside the house.

Ghosn’s escape still leaves another ex-Nissan board member, Greg Kelly, facing trial in Japan. “We are studying the implications and don’t believe Mr. Kelly should have been indicted to begin with,” said James Wareham, a Washington-based attorney for Kelly.

Kelly was taken into custody at almost the same time as Ghosn, indicted for allegedly helping the car titan under-report his compensation, and then freed on bail in December 2018. Kelly has denied breaking the law.

--With assistance from Isabel Reynolds, Lisa Du, Finbarr Flynn, Matthew Campbell and Geraldine Amiel.

To contact the reporters on this story: Ania Nussbaum in Paris at anussbaum5@bloomberg.net;Kae Inoue in Tokyo at kinoue@bloomberg.net;Angus Whitley in Sydney at awhitley1@bloomberg.net;Dana Khraiche in Beirut at dkhraiche@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Paul Sillitoe

©2020 Bloomberg L.P.