Carlos Ghosn: I Have Been Wrongly Accused And Unfairly Detained

JAN 8 2019 BY MARK KANE 25

Carlos Ghosn defends his innocence in court

For the first time since arrest about seven weeks ago, Carlos Ghosn (former Nissan CEO and leader of Renault-Nissan-Mitsubishi Alliance) had an opportunity to appear in court in Tokyo. In a very polite statement (see below), Ghosn rejects the allegations and ensures that he is innocent.

We hope that Ghosn – the man behind the Nissan LEAF – really is innocent. At least it’s hard to believe that someone like him would try to earn probably just several more percent of his normal earnings (just guessing), while at the same time refusing to change jobs to become CEO of other manufacturers and maybe double or triple his earnings.

According to reports from Japan, Carlos Ghosn was “noticeably thinner, with his normally jet black hair graying at the roots” as the conditions are what they are:

“Anthony Ghosn told French newspaper Journal du Dimanche in an interview published Sunday that his father had lost 22 pounds “because he’s eating three bowls of rice a day. The conditions are not very good.”

“Every day when he wakes up in the detention center, he can tell the prosecutor that he challenges the accusations against him, or on the contrary, he can confess and be released,” Anthony Ghosn told the French weekly newspaper. “For seven weeks, his decision has been quite clear. … He will not give up.””

If guilt is not proven, Japan will damage its image and honor, while all eyes will turn on Nissan execs who started all those allegations.

Statement of Carlos Ghosn

Your Honor,

I am grateful to finally have the opportunity to speak publicly. I look forward to beginning the process of defending myself against the accusations that have been made against me.

First, let me say that I have a genuine love and appreciation for Nissan. I believe strongly that in all of my efforts on behalf of the company, I have acted honorably, legally, and with the knowledge and approval of the appropriate executives inside the company — with the sole purpose of supporting and strengthening Nissan, and helping to restore its place as one of Japan’s finest and most respected companies.

Now I would like to address the allegations.

1. The FX Forward contracts

When I first joined Nissan and moved to Japan almost 20 years ago, I wanted to be paid in U.S. dollars, but was told that that was not possible and was given an employment contract that required me to be paid in Japanese yen. I have long been concerned about the volatility of the yen relative to the U.S. dollar. I am a U.S. dollar-based individual – my children live in the U.S. and I have strong ties to Lebanon, whose currency has a fixed exchange rate against the U.S. dollar. I wanted predictability in my income in order to help me take care of my family.

To deal with this issue, I entered into foreign exchange contracts throughout my tenure at Nissan, beginning in 2002. Two such contracts are at issue in this proceeding. One was signed in 2006, when the Nissan stock price was around 1,500 yen and the yen/dollar rate was around 118. The other was signed in 2007, when the Nissan stock price was around 1,400 yen and the yen/dollar exchange rate was around 114.

The 2008–2009 financial crisis caused Nissan’s shares to plummet to 400 yen in October 2008 and to 250 yen in February 2009 (down more than 80% from its peak) and the yen/dollar exchange rate dropped below 80. It was a perfect storm that no one predicted. The entire banking system was frozen, and the bank asked for an immediate increase in my collateral on the contracts, which I could not satisfy on my own.

I was faced with two stark choices:

1. Resign from Nissan, so that I could receive my retirement allowance, which I could then use to provide the necessary collateral. But my moral commitment to Nissan would not allow me to step down during that crucial time; a captain doesn’t jump ship in the middle of a storm.

2. Ask Nissan to temporarily take on the collateral, so long as it came to no cost to the company, while I gathered collateral from my other sources.

I chose option 2. The FX contracts were then transferred back to me without Nissan incurring any loss.

2. Khaled Juffali

Khaled Juffali has been a long-time supporter and partner of Nissan. During a very difficult period, Khaled Juffali Company helped Nissan solicit financing and helped Nissan solve a complicated problem involving a local distributor – indeed, Juffali helped Nissan restructure struggling distributors throughout the Gulf region, enabling Nissan to better compete with rivals like Toyota, which was outperforming Nissan.

Juffali also assisted Nissan in negotiating the development of a manufacturing plant in Saudi Arabia, organizing high-level meetings with Saudi officials.

Khaled Juffali Company was appropriately compensated – an amount disclosed to and approved by the appropriate officers at Nissan – in exchange for these critical services that substantially benefited Nissan.

3. The FIEL Allegations

Four major companies sought to recruit me while I was CEO of Nissan, including Ford (by Bill Ford) and General Motors (by Steve Rattner, the then-Car Czar under President Barack Obama). Even though their proposals were very attractive, I could not in good conscience abandon Nissan while we were in the midst of our turnaround. Nissan is an iconic Japanese company that I care about deeply. Although I chose not to pursue the other opportunities, I did keep a record of the market compensation for my role, which those companies offered me if I had taken these jobs. This was an internal benchmark that I kept for my own future reference – it had no legal effect; it was never shared with the directors; and it never represented any kind of binding commitment.

In fact, the various proposals for non-compete and advisory services post-retirement made by some members of the board did not reflect or reference my internal calculations, underscoring their hypothetical, non-binding nature.

Contrary to the accusations made by the prosecutors, I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed.

Moreover, I understood that any draft proposals for post-retirement compensation were reviewed by internal and external lawyers, showing I had no intent to violate the law. For me, the test is the “death test”: if I died today, could my heirs require Nissan to pay anything other than my retirement allowance? The answer is an unequivocal “No.”

4. Contribution to Nissan

I have dedicated two decades of my life to reviving Nissan and building the Alliance. I worked toward these goals day and night, on the earth and in the air, standing shoulder to shoulder with hardworking Nissan employees around the globe, to create value. The fruits of our labors have been extraordinary.

We transformed Nissan, moving it from a position of a debt of 2 trillion yen in 1999 to cash of 1.8 trillion yen at the end of 2006, from 2.5 million cars sold in 1999 at a significant loss to 5.8 million cars sold profitably in 2016. Nissan’s asset base tripled during the period.

We saw the revival of icons like the Fairlady Z and Nissan G-TR; Nissan’s industrial entry into Wuhon, China, St. Petersburg, Russia, Chennai, India, and Resende, Brazil; the pioneering of a mass market for electric cars with the Leaf; the jumpstarting of autonomous cars; the introduction of Mitsubishi Motors to the Alliance; and the Alliance becoming the number one auto group in the world in 2017, producing more than 10 million cars annually. We created, directly and indirectly, countless jobs in Japan and re-established Nissan as a pillar of the Japanese economy.

These accomplishments – secured alongside the peerless team of Nissan employees worldwide – are the greatest joy of my life, next to my family.

5. Conclusion

Your Honor, I am innocent of the accusations made against me. I have always acted with integrity and have never been accused of any wrongdoing in my several-decade professional career. I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations.

Thank you, your Honor, for listening to me.


  • Nissan initiated an internal investigation about Carlos Ghosn’s earnings
  • November 19 – Carlos Ghosn and Greg Kelly were surprisingly arrested in Japan over alleged financial misconduct at Nissan (under-reporting his income of some $44 million in 2010-2015)
  • November 22 – The board of directors for Nissan removed Carlos Ghosn and Greg Kelly from Representative Director positions (Ghosn was also Chairman of the Board).
  • November 26 – Mitsubishi Motors removed Carlos Ghosn from his role as Chairman of the Board and Representative Director, following Nissan.
  • Renault abstained from the reaction
  • Nissan was unable to choose a successor for Ghosn
  • December 10 – Carlos Ghosn and Kelly were re-arrested on allegations of under-reporting his income for the subsequent three years
  • December 20 – Tokyo District Court unexpectedly rejected prosecutors’ request to extend Ghosn’s and Kelly’s. Ghosn was expected to be free on December 21
  • December 21 – Carlos Ghosn was re-arrested on a new allegation of making Nissan shoulder $16.6 million in personal investment losses. Kelly was not included so he was released from jail on December 25 after being granted bail.
  • December 31 – The Tokyo District Court extends Carlos Ghosn’s detention by another 10 days to at least January 11.
  • January 8 – Carlos Ghosn has appeared in court for the first time

Source: Reuters, CNN

Categories: Mitsubishi, Nissan, Renault

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25 Comments on "Carlos Ghosn: I Have Been Wrongly Accused And Unfairly Detained"

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My advice to him would be that if he ever gets out of Japan, never go back.

Understand the sentiment completely, however it is unfair to judge a whole country based on a few corrupt oligarchs. Consider how the rest of the world currently looks at the US. We jail and even slaughter children at the border because we are afraid of them, want to build walls and chase people who look different for their papers. We are better than that!

Regardless of the individual, the capricious nature of the Japanese legal system is being exposed in this exercise.

No bail, no lawyers, 99% conviction rate if charged… Not a system in which Japanese citizens should take any pride.

99% conviction rate may mean that prosecutors do not jump with arbitrary charges unless they have firm evidence on hand.

It isn’t like US legal system is prime example anyway. Most of the cases in the US system are decided with not trial at all, by negotiations, settlements and threats of much more severe punishment if you ask for trial. You can be arrested for random reason and assumed guilty by publishing mugshot for public humiliation. You can sit for years in jail for petty crime you have no money for bail. Civil legal system is just out of reach for most of the population, it is too expensive – no justice for you if you can’t buy it.

Quite a drama!

From what others have commented about the case, the Japanese criminal justice system has a 99% conviction rate; suspects are held in prison and interrogated for day after day until they break down and give a confession… whether they are guilty or not. In addition to being denied bail — and this is just for accusations of failure to report some income for tax purposes! — Ghosn has not only been denied bail; he has also been denied access to his American lawyers.

Kudos to Ghosn for being able to withstand this kind of intense pressure — far beyond mere bullying. Of course I don’t have any personal knowledge of the case, so I don’t know who is telling the truth and who isn’t. But from reading reports, I’ve formed the impression that Nissan’s board of directors is using trumped up charges against Ghosn, who they view as a “foreigner”, as an excuse to oust him from his position at Nissan.

There are a lot of things to admire in the Japanese culture, but their cultural prejudice against foreigners certainly isn’t one of them. Neither is the lack of civil rights for the accused in their criminal justice system. 🙁

Geez if he is innocent, what a slap in the face he received from Nissan.
Goes to show, never trust a corporation. There is no honor or loyalty anywhere.

If he gets free, I’m sure some members of the Nissan board would be without a job after this.
I would at least have fired all that took part in it.

The hydrogen lobby has fed Carlos to the Jackals. RIP Leaf.

Yakuza loves hydrogen.

Thanks for that insight. It all makes sense, now.

Its all about Control. The French have right now proportional more to say relative to the strength of Renault vs Nissan.

The French risked more money, and turned the company around.

There is somewhere a group of old-guard Nissan execs sitting in a smoke filled room downing Sake (perhaps even nervously pouring their *own drinks!*)… thinking:

Crap… Carlos is not breaking… … he is not going for a negotiated out-of-jail deal… what now? Who’s idea was this?

It is a farce. My respect for Japanese justice is no longer. They are like Russia. Very disgusting. The West should warn turists and business people about visiting Japan. Japan is not safe to visit.

I imagine many multi-national executives have already decided not to visit Japan anymore.

If the leader of a highly visible and scrutinized major auto manufacture is not safe from being put in jail, who is?

It appears Carlos still isn’t taking whatever plea deal that the prosecutor is offering. I hope they don’t turn the knife in his back, before he is released.

Escape Japan Godspeed Mr. Goshen!

Stay strong Ghosn don’t let the bastards break you. The conditions sound like they are bordering on torture. Unacceptable treatment for someone who even if guilty (which I doubt at this point), is grossly disproportionate to the crime.

Hopefully Ghosn can remain with Renault and spur them into going all out on electric. They already have significant more models than Nissan.

Holly crap! Is this Nissangate?

Free Ghosn!

I want that on a T-Shirt! Mr. Ghosn’s words seem forthright, complete, and compelling. I am not going on a lot of details, but you can bet the closest I will get to Japan is the EPCOT Center from here on out. Thank you, InsideEVs, for publishing this. Please keep us informed as this progresses.
Compare this to the fines and punishments from the SEC against Elon Musk. Now Larry Ellison is on the BoD and Tesla keeps on keepin’ on. Meanwhile, loads of damage to Nissan here.

This whole proceeding is giving me a new perspective on the Japanese.

They certainly making themselves look like the biggest back stabbers of all time.

There is a lot to admire in Japanese culture. But they also have a reputation for extreme racism and xenophobia.

A slew of detensions is coming for japs in myriad of jurisdictions, it won’t be just nissan jap execs.

“If guilt is not proven, Japan will damage its image and honor, while all eyes will turn on Nissan execs who started all those allegations.”
I knew it, so I wish that Japanese people needs to do something about it. Otherwise, the damage would be permanent.
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