The elephants in the room are the payments made to a Beirut-based entity affiliated with his son [1][2].
[1] https://www.bloomberg.com/news/articles/2019-04-22/lebanese-...
[2] https://www.lesechos.fr/industrie-services/automobile/renaul...
GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives." At some point later, SBA paid GFI. The Japanese suggest this was a kickback scheme but 1) the fact that one firm paid another and vice versa is not ipso facto evidence of financial wrongdoing 2) if this really is a kickback scheme, why such low sums of money relative to his net worth?
The other accusation in the articles you reference is that GFI made payments to a company named "Shogun Investments", of which Ghosn's son was involved, and that he directed those funds to his own financial startup, "Shogun Enterprises", which then possibly used the funds to buy a yacht.
The first charge has no clear basis for impropriety, and the second is against Ghosn's son, not Ghosn (and btw, even if Ghosn's son did misuse investor funds -- and he denies doing so -- it wouldn't be the first startup in the world to do so).
Unless you can explain to me something I'm missing these accusations do not strike me as "the elephant in the room."
Nissan-Renault paid "overseas distributors" for services allegedly never rendered. Those funds then found their way to GFI, a Ghosn family controlled entity. This is, if true, embezzlement.
It was this finding that caused Ghosn's support at Renault to crater. It's also what prompted the French probes.
Both articles describe the transfers as misappropriations of funds. These transfers were a revelation not only to Nissan, but also to Renault. They prompted probes in both France and Japan (and likely will, at this point, in the United States), it fits a pattern of embezzlement.
Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
The Japanese criminal-justice system is deeply flawed. But allegations are made in multiple cases across multiple jurisdictions and describe seriously criminal behavior.
A lot of his complaints was that the prosecutors were leaking TONS of info but he was prohibited from replying and that he had no guarantee of a trial date.
This whole compensation thing seemed so weak. The filings disclosed what he was paid, there was no agreement to pay him more. He was keeping track it seemed like of what he felt he should get paid. I'm sure he (and many other CEO's) sometimes calculate how much they believe they should get -> maybe they propose those numbers to the board etc. How is that criminal? He wasn't paid that much if you look at it. There are .bomb scammers getting paid far more.
The other odd thing is the claim that he didn't render services. By all accounts the guy was a workaholic.
For this he's been in jail with no confirmed trial date. Given the supposedly slam dunk nature of the case why don't they go to trial on the compensation FEIL charges?
Given the specific payments aren't publicly detailed, it would be impossible to say.
> And folks said these types of payments generally got a lot of levels of approval?
This is contradicted by both Nissan and Renault's Boards. (The approvers were Ghosn and the other executive in jail in Japan.)
"Describing as" != prove. And when it comes to throwing people in jail we should strive for prove.
> Broadly speaking, if management finds their operational budget in their personal account without the Board's knowledge, that's fraud.
First, no Nissan funds were in Ghosn's "personal account." Not sure where you're getting that. The articles clearly describe GFI as an arm of Nissan directly controlled by Ghosn but that is not a personal account -- it was still a Nissan account.
Second, Ghosn's defense has been all along that others in the firm approved the transactions. Someone somewhere was clearly signing the checks -- I don't know how true this is but it is a legitimate defense.
Allegations are not proof. I can accuse you of anything -- doesn't make it true.
Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it.
Pre-trial detention is common worldwide. In this case, it was loosened. (Clearly, too much.)
> Ghosn may indeed have engaged in criminal activity but nothing you describe proves it, or even seriously indicates it
It's not proven. That was for the trial to conclude. Criminal efforts in Japan, France and elsewhere will continue.
There is a preponderance of evidence, the legal standard in most jurisdictions, for bringing charges around embezzlement. I agree the compensation charges were weak. But they weren't the bombshell.
In any case, we'll get the facts over the coming years. The Japanese case will continue. And Ghosn fleeing will likely prompt investigations in the United States, at the very least for asset seizure.
Given how conservative Japanese prosecutors are reputed to be in bringing cases in the first place and Ghosn's decision to flee , I'd bet they have reasonable evidence.
Olympus - Accounting fraud - overseas whistleblower was the one prosecuted!
Lots of other cases - Japanese CEO's doing MUCH MUCH worse face zero prison time and/or prosecution.
A lot of folks posturing here. The compensation charges - which would have been the first to go to trial if they'd ever gotten to trial (the prosecutors have been dragging things out) were laughably weak. If this is what puts CEO's in jail for years it's a total scam - 100's of japanese CEO's do this and much more. These companies are tied together every which way.
The problem is that if the super rich and powerful are allowed to blatantly show their middle finger to the law and profit, it creates distrust in government which historically resolves through revolution or nowadays in more peaceful countries resolves through election of unsavoury leaders to positions of power.
Doing a runner will probably irrevocably lose him a lot of popular support from people willing to give him the benefit of doubt no matter what PR dog and pony show he puts up. So looks like he's going to be in Lebanon for the next decade.
This is the most likely explanation given Japan’s history of xenophobia and that Nissan is a very high profile, iconic Japanese company
But that's completely orthogonal as to whether Ghosn is guilty of anything. You don't get a free pass for fraud (embezzlement in this case) just because the context is political. I'm surprised that a lot of people are mixing these two things together. There is what Ghosn did, or is accused of doing (embezzlement), and there is why anyone went in to check (prevent the Renault Nissan merger).
The US government is also well known to use its judicial branch to exert political pressure on foreign actors (see the Alstom buyout by GE). That doesn't make the fraud perpetrated by individuals somehow acceptable. But it can justify governments getting involved to prevent these individual actions having larger consequences.
It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was.
For example the 3 former execs of Tepco who have been charged with criminal negligence in relation with the Fukushima disaster have never been arrested. I don't think that execs at Kobe Steel who knew about falsified data regarding defective airbags were arrested. Etc.
On the other hand, Olympus CEO, first foreign CEO, was fired for blowing the whistle on accounting fraud within the company...
Look at the Takata airbag executives. Their decisions resulted in the actual deaths of human beings and they were not treated as harshly.
Yeah, never happens, just like you almost never see any big profile politician beyond bars in Japan. And Japanese CEOs are pretty much affiliated to politicians, so there you have it.
By the way it is astonishing how much the press in Japan is painting Gohn as a culprit on an ongoing basis despite any actual trial and all. The media is completely sold to power here.
Specifically he's accused of:
1) Concealing the true scale of his retirement package, none of which had been paid
2) During the '08 crisis he had Nissan temporarily take on hedging contracts (used to blunt the impact of currency fluctuations of the yen) since his bank was demanding collateral he didn't have; then later securing a line of credit from a Saudi businessman who was paid $14 million by Nissan (ostensibly for regional distribution)
I'm no forensic accountant but that's not a lot of smoke, much less fire. The retirement package was still theoretical and it's hard to believe a man being paid $20 million a year was really engaging in financial skullduggery for what amounted to peanuts of his net worth.
As others in this thread have pointed out, this seems to be a case of the Japanese looking down on greed, whereas it's the norm in America and some parts of Europe.
Also the Japanese were possibly reluctant to see a big Japanese company (Nissan) subsumed into a large international behemoth (Ghosn was trying to formally merge Renault and Nissan at the time of his arrest).
Ghosn is probably right that he can't get a fair trial in Japan's notoriously prosecutor-friendly justice system. Even the Businessweek article notes the conviction rate is at or near 100%.
Ghosn may have been arrogant and greedy but unless new details are presented the publicly available evidence suggests these charges are extremely flimsy.