8 ms·

I'm no fan of fatcat CEOs but by most accounts the charges against Ghosn are weak at best. See: https://www.bloomberg.com/news/features/2019-01-31/inside-the-ta

I'm no fan of fatcat CEOs but by most accounts the charges against Ghosn are weak at best. See: https://www.bloomberg.com/news/features/2019-01-31/inside-the-takedown-of-renault-nissan-chairman-carlos-ghosn https://www.bloomberg.com/news/features/2019-01-31/inside-th... 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.

JumpCrisscross 7y ago
> that's not a lot of smoke, much less fire 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-firm-said-to-link-nissan-renault-cash-to-ghosn-s-son https://www.bloomberg.com/news/articles/2019-04-22/lebanese-... [2] https://www.lesechos.fr/industrie-services/automobile/renault-une-enquete-interne-charge-carlos-ghosn-1005792 https://www.lesechos.fr/industrie-services/automobile/renaul...
- ordinaryperson 7y ago
  How are the GFI payments to SBA the "elephant in the room"? 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."
  - JumpCrisscross 7y ago
    > GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives." 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.
    - ordinaryperson 7y ago
      What proof is there these services were never rendered? Neither article you cited claims that.
      - JumpCrisscross 7y ago
        > What proof is there these services were never rendered? Neither article you cited claims that 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.
mytailorisrich 7y ago
Whether or not he is guilty of any wrongdoings, I think what many people have picked up is what seems to be 'special treatment' he received from the Japanese authorities. 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...
- ordinaryperson 7y ago
  I agree, it was odd the way they immediately threw the book at him. Look at the Takata airbag executives. Their decisions resulted in the actual deaths of human beings and they were not treated as harshly.
  - deleted 7y ago
    [deleted]
- ekianjo 7y ago
  > It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was. 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.
- LunaSea 7y ago
  So he got a special treatment, then fled, thus justifying the special treatment.
  - tcgv 7y ago
    From what's being discussed in this thread it's more the other way around, he fled because he was receiving special treatment, had him being given a fair prosecution he wouldn't feel the need to flee Japan
chaostheory 7y ago
> 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). This is the most likely explanation given Japan’s history of xenophobia and that Nissan is a very high profile, iconic Japanese company
- techpop10 7y ago
  This is exactly right. I have worked for Japanese companies, do not underestimate the weight cultural pride had in how they prosecuted this case. It's not like the US at all.
- Xixi 7y ago
  The reason the Japanese government stuck its nose in Ghosn affairs is not particularly secret: it was to prevent the merger of Renault and Nissan, and was driven by Nissan employees who felt the merger was very one-sided (all power going to France). This is what was said in Japanese media shortly after Ghosn arrest. 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.
  - LifeLiverTransp 7y ago
    Right now we are back in medieval times, might makes right. If you have the power, you can create charges, evidence and flay some culprit like in the olden days. The whole lawsaying is by now the equivalent of some medieval peasant justifying witch burnings by stating that "In a world ruled by god, god would intervene against evil, thus she was evil. This the law.." Its just talking, to lower the mental load of the dis-sonance of thought and reality. This whole set of affairs lately, this is what civilisational downfall looks like. Im sure, all those cooperate warlords have done no wrong, to have such powers.

JumpCrisscross 7y ago

> that's not a lot of smoke, much less fire 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-firm-said-to-link-nissan-renault-cash-to-ghosn-s-son https://www.bloomberg.com/news/articles/2019-04-22/lebanese-... [2] https://www.lesechos.fr/industrie-services/automobile/renault-une-enquete-interne-charge-carlos-ghosn-1005792 https://www.lesechos.fr/industrie-services/automobile/renaul...

ordinaryperson 7y ago
How are the GFI payments to SBA the "elephant in the room"? 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."
- JumpCrisscross 7y ago
  > GFI (controlled by Ghosn) paid SBA (an Omani businessman, Suhail Bahwan) for "marketing incentives." 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.
  - ordinaryperson 7y ago
    What proof is there these services were never rendered? Neither article you cited claims that.
    - JumpCrisscross 7y ago
      > What proof is there these services were never rendered? Neither article you cited claims that 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.

mytailorisrich 7y ago

Whether or not he is guilty of any wrongdoings, I think what many people have picked up is what seems to be 'special treatment' he received from the Japanese authorities. 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...

ordinaryperson 7y ago
I agree, it was odd the way they immediately threw the book at him. Look at the Takata airbag executives. Their decisions resulted in the actual deaths of human beings and they were not treated as harshly.
- deleted 7y ago
  [deleted]
ekianjo 7y ago
> It seems very rare, if not unheard of, in Japan for a CEO to be arrested and thrown to prison the way he was. 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.
LunaSea 7y ago
So he got a special treatment, then fled, thus justifying the special treatment.
- tcgv 7y ago
  From what's being discussed in this thread it's more the other way around, he fled because he was receiving special treatment, had him being given a fair prosecution he wouldn't feel the need to flee Japan

chaostheory 7y ago

> 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). This is the most likely explanation given Japan’s history of xenophobia and that Nissan is a very high profile, iconic Japanese company

techpop10 7y ago
This is exactly right. I have worked for Japanese companies, do not underestimate the weight cultural pride had in how they prosecuted this case. It's not like the US at all.
Xixi 7y ago
The reason the Japanese government stuck its nose in Ghosn affairs is not particularly secret: it was to prevent the merger of Renault and Nissan, and was driven by Nissan employees who felt the merger was very one-sided (all power going to France). This is what was said in Japanese media shortly after Ghosn arrest. 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.
- LifeLiverTransp 7y ago
  Right now we are back in medieval times, might makes right. If you have the power, you can create charges, evidence and flay some culprit like in the olden days. The whole lawsaying is by now the equivalent of some medieval peasant justifying witch burnings by stating that "In a world ruled by god, god would intervene against evil, thus she was evil. This the law.." Its just talking, to lower the mental load of the dis-sonance of thought and reality. This whole set of affairs lately, this is what civilisational downfall looks like. Im sure, all those cooperate warlords have done no wrong, to have such powers.