(Bloomberg Opinion) -- “In April and May of last year, there had been so much tension over the merger,” said Carole Ghosn, wife of the indicted former auto magnate Carlos Ghosn, who had been pushing Renault and Nissan to merge. “The Japanese were even approaching French government officials. And then in June, it stopped. We know now that it’s because the Japanese had figured out Plan B.”
“What was Plan B?” I asked.
“To take Carlos down,” she said.
This coming weekend, the Group of 20 summit will take place in Japan for the first time. The Japanese are hoping that hosting the leaders of the world’s most powerful economies will reflect well on the country and its place in the world. As the Japanese government put it on its G-20 website:
The G20 Summit is a perfect opportunity for people from all over the world to see and experience not only a newly revitalized and transforming Japan … but also the wide-ranging appeal of the various regions that will host these consequential discussions.
No one doubts that Japan is a thoroughly modern country. It has a democratic system of government, a vibrant culture and some of the best-known corporations in the world. But Carlos Ghosn’s allies — starting with his wife Carole — are taking the occasion to argue that Japan has a darker side: a nationalism so instinctive and so powerful that it would rather frame an innocent man than see one of its marquee companies bought by Westerners.
Ghosn, once the chief executive of France’s Renault SA and chairman of Japan’s Nissan Motor Co. Ltd. — and the architect of the long-running alliance between the two companies — was arrested last November as he stepped off an airplane in Tokyo. He was tossed into a jail cell where the lights were always on, and the temperature was always frigid — and interrogated for six to eight hours at a stretch, as prosecutors tried to force a confession.
He spent more than 130 days under those difficult conditions; in Japan, some people call this “hostage justice,” because its purpose is to hold the accused until he cracks. Ghosn, however, did not crack. He is now out of jail, though essentially under house arrest, charged with four counts of financial improprieties. He spends his days preparing for a trial that will likely take place next year.
Ghosn’s indictment notwithstanding, his allies — the few who haven’t abandoned him — maintain another theory about his arrest: that it was a plot to block the Renault-Nissan merger. As the months have passed, this theory has gained credence.
The Wall Street Journal reported, for instance, that Hiroto Saikawa, Nissan’s current CEO, admitted to a group of Renault executives that two of his underlings had secretly investigated Ghosn in order to derail any possibility of a merger. It also seems increasingly clear that the Japanese government played a behind-the-scenes role.
“Nissan has accused Carlos of hiding income,” said Carole Ghosn, with a look of frustration, “but nothing had been signed or approved.” Nissan also accused Ghosn of using company funds to buy a series of homes. “All those houses were approved by the company,” she insisted. Making the case for her husband’s innocence is a large part of the reason she gives interviews.
We met at a breakfast place on Manhattan’s East Side. She is a petite woman in her early 50s; her eyes betray a deep sadness. When Ghosn was first released from prison in early March, she spent a month with him in Tokyo before he was rearrested and returned to prison for another 23 days. When he was again released on bail at the end of April, one condition was that he could not see or speak with his wife.
Carole Ghosn herself has been questioned by Japanese prosecutors, and her name has been bandied about in the Japanese press as a possible co-conspirator. She told me that after her husband’s second arrest, she wasn’t allowed to go anywhere in the house alone — not even the bathroom. “They just wanted to humiliate me,” she said.
Ghosn talks to almost nobody except his lawyers. His Japanese friends have turned their backs on him, with the exception of his former housekeeper, who brings food and checks in with him every few days.
People who have seen him are shocked by his appearance. He has lost a lot of weight — but far more alarming, he has lost much of the energy that used to mark him. He can concentrate only for short stretches, and he has frequent memory lapses. Ms. Ghosn attributes this to his treatment in prison. “It breaks my heart to see him like this,” she said, tears welling in her eyes.
As the G-20 meeting approaches, Carole Ghosn and the Ghosn media team are publicly emphasizing that civilized countries don’t use their criminal justice system to keep companies from falling into foreign hands.
In a recent article in Japan Today, Takashi Takano, one of Ghosn’s lawyers, described Ghosn’s case as “the return of Japan Inc” — an era when the government and Japanese companies worked together to lock foreigners out.
If Nissan had legitimate concerns about Ghosn, the company should have come to him and demanded an explanation. Only if his answers were unsatisfactory should prosecutors have been called in. Instead, Ghosn’s surprise arrest became Nissan’s excuse to remove him as chairman. Renault held out for a while but eventually had to replace him as well, because it needed a functioning CEO. Even if Ghosn is found innocent after a trial, his career is over.
There is a second issue: Japan’s “hostage justice” system, its use of relentless interrogation and rough prison conditions to extract confessions. Many people have been stunned to discover that the Japanese judicial system is closer to that of Russia and China than to the U.S. and Britain in that it has less to do with establishing guilt or innocence than extracting confessions.
“This case has shed light on the system,” Ms. Ghosn said. “Executives from the west are going to think twice about working in Japan.”
Our conversation was coming to a close. As I began to put away my notebook, there was one more thing she wanted to say: “I just want my husband back.”
To contact the editor responsible for this story: Mary Duenwald at mduenwald@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
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