Free on Bail, Carlos Ghosn Girds for the Legal Fight of His Life

(Bloomberg) -- The odds have been stacked against Carlos Ghosn, the once high-flying head of Nissan Motor Co. and Renault SA, since he was arrested in a country with a 99 percent conviction rate more than three months ago. Now, his luck may finally be turning.

Ghosn walked free from Tokyo’s main jail late Wednesday afternoon for the first time since November, a day after a court accepted the latest of his applications for bail. Disguised in a baseball cap and face mask, reporters outside the detention center nearly missed his departure, in a silver Suzuki van. He posted a hefty bond of 1 billion yen ($9 million), and agreed to remain under close supervision in Japan, where he’s been indicted for a range of financial crimes relating to his two-decade tenure at Nissan.

Free after months of interrogations and spartan prison conditions, Ghosn’s first stop was to his lawyer’s office. He changed into a suit, the uniform of the countless boardroom battles that propelled the Franco-Brazilian executive to the top of the global auto industry, where he held the alliance between Nissan, Renault and Mitsubishi Motors Corp. together.

It was a telling move. Ghosn’s release allows him to start planning in earnest for what’s sure to be a remarkable trial, one where a guilty verdict could see him put back behind bars for many years. While Japanese prosecutors say Ghosn engaged in a pattern of financial misconduct, he’s emphatically denied wrongdoing and argued the charges are the result of a conspiracy within Nissan to block his plan to merge the carmaker with Renault, its largest shareholder.

Inside the Takedown That Landed Carlos Ghosn in a Japanese Jail

Japan’s penal system limited Ghosn’s contact with family, colleagues and his legal team, which he replaced less than a month ago. Out of jail, “he’s able to collect information and it will be easier to communicate with his lawyers and work out a defense strategy,” said Nobuko Otsuki, a Tokyo-based defense lawyer. “It would definitely be advantageous.”

But it may not be comfortable, especially for a jet-setting polyglot who probably logged more air miles while running the world’s biggest auto alliance than any other corporate executive. Ghosn is barred from leaving Japan and will have surveillance cameras watching the entrances to his residence, the location of which is unknown. He can’t go on the Internet or contact people involved with the case. His mobile phone and computer use will be restricted.

And Ghosn’s in for a tough fight. Japan’s criminal-justice system boasts a near-perfect conviction rate that’s comparable to China’s, and prosecutors enjoy a wide range of procedural advantages unavailable to their counterparts in the West. He could be re-arrested on fresh charges at any time, putting him back behind bars with the trial likely months away.

Ghosn will, however, be better equipped to assist his lawyers from outside prison walls. His home until Wednesday had been a cell of about 75 square feet (7 square meters), where he had no access to a phone, email, or personal documents. That put him at a severe disadvantage fighting charges that are premised on subtle interpretations of Japanese law, and which involve complex transactions executed as far back as ten years.

The bail win vindicates Ghosn’s decision to abandon his previous Japanese legal team, which was headed by former prosecutor Motonari Otsuru. Soft-spoken and deferential to his ex-colleagues, Otsuru took a just-the-facts approach to advocating for Ghosn, declining to comment on potential intrigue by Nissan. His new lawyer, Junichiro Hironaka, has been more aggressive, notably warning Japanese officials that Ghosn’s case could jeopardize investor confidence in Asia’s second-largest economy.

“To the extent he can bring public opinion, global public opinion, to bear on Japan and the Japanese legal system, that has to have an impact,” Stephen Givens, a professor of law at Sophia University in Tokyo, said of Ghosn’s defense. “The judges who are looking at this case, somewhere in the back of their minds, they have to think, ‘this is not playing well outside of Japan.”’

Ghosn’s fall from grace will go down among the most memorable in recent corporate history. Nissan, which he helped save from the brink of bankruptcy after he was installed as chief operating officer by Renault in 1999, fired him from his role as chairman almost immediately after his arrest, and says it found “substantial evidence” that he repeatedly misused company funds. Renault, where Ghosn served as chairman and CEO, has said it hasn’t uncovered wrongdoing, but he lost his positions there as well in January.

In a statement Tuesday night, Ghosn said he was “extremely grateful” to family and friends who had supported him, and that he is “innocent and totally committed to vigorously defending myself in a fair trial.” Nissan declined to comment on Ghosn’s release, saying it has no role in decisions made by courts or prosecutors.

His legal situation has roiled the relationship between Nissan and Renault, which are partners in a complex alliance of cross-shareholdings and shared production. Nissan’s CEO, Hiroto Saikawa, led a team of executives who covertly assisted prosecutors to engineer Ghosn’s arrest -- the culmination of an internal probe into the chairman of which Renault received no word. The role of Saikawa, who was a protege of Ghosn’s but criticized plans for a merger, is one of the central planks of Ghosn’s claim that he’s the victim of a coup by rivals.

The Big Winner From Carlos Ghosn’s Arrest? His Protege

In addition to his legal battle, Ghosn now has better access to the court of public opinion. Saikawa and other Nissan executives severely criticized Ghosn during his detention, portraying him as an out-of-control boss who mistook the company’s resources for his own.

Normally combative and media-savvy, the former chairman had little chance to defend himself -- until now.

--With assistance from Lisa Du.

To contact the reporter on this story: Matthew Campbell in Singapore at mcampbell39@bloomberg.net

To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net, Young-Sam Cho, Frank Connelly

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