Nissan’s Ghosn denies every charge

For the first time since his arrest in November, Nissan chairman Carlos Ghosn spoke openly in court on Tuesday – and both he and his legal counsel came out swinging.

“I am innocent of the accusations made against me,” the Brazilian executive declared in a special hearing held to discuss the reasons for his detention. “I have always acted with integrity.”

On the same day, his lawyer, Motonari Otsuru, gave an indication of how he plans to defend his client.

Both men face a stern task. While Japanese prosecutors drop some 50% of cases placed before them, when they do indict, their conviction rate is 99%. Those arrested in Japan can be held in detention for up to 23 days, and in rare cases, even longer, without charges being filed. During that time, their access to the outside world, and even lawyers, is severely limited.

Mark Karpeles, another foreign executive who suffered a similar fate to the one Ghosn is now facing in Japan, told Asia Times today of the sympathy he felt for the former Nissan chief, who faces daunting psychological and legal conditions.

All this suggests that the odds are not in favor of Ghosn being granted bail or being found innocent. But by speaking out publicly today, he added the latest chapter to a legal saga that has gripped the world, and launched a volley that the Japanese press and prosecutors cannot ignore.

Battered but unbowed

Ghosn has been held in custody since his arrest in November on allegations of financial misconduct. He was then re-arrested on similar charges, and most recently was re-arrested a third time on charges of special breach of trust. In each case, he was not released from custody; these “re-arrests” took place immediately after he was served with indictments.

Prosecutors allege Ghosn shifted a private investment loss of over $16 million dollars onto Nissan’s ledgers in the aftermath of the 2008 financial crisis. Today in court, according to those reporters who were able to enter the room, a visibly tired and haggard-looking Ghosn gave a 10-minute statement. In it, he denied all charges.

He had lost nearly 10 kilos in weight, with his hair was greying at the temples and his hands locked in cuffs.

He opened by saying: “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.”

The chairman then made a declaration of his love for Nissan, the company that he saved from going under. That feat that made him a hero to many in Japan; he was even featured in a manga comic book.

Such “love of company” – aisha-seishin – may seem incomprehensible to many outside Japan, but in the island nation, where until very recently lifetime employment was a real possibility, loyalty to firm has been considered a virtue. Ghosn, it appears, knows that for salarymen, this kind of statement can be heart-rending.

“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,” he insisted.

Ghosn then proceeded to address all the charges against him, denying each one. He ended by saying: “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.”

And Ghosn’s own defense, it appears, was only part of a two-pronged strategy.

An outspoken defense

His lawyer, Otsuru – formerly a prosecutor in the division engaged in the Ghosn case – addressed a press conference held at the Foreign Correspondents Club of Japan. It is unusual for a lawyer in Japan to hold a press conference before a trial. And in regard to the venue, some believe that foreign correspondents in Japan do not labor under the same pressures that vernacular reporters may be subject to.

At the FCCJ, Otsuru argued that not only were all previous charges spurious, but that Nissan was aware of all the actions Ghosn had undertaken. Otsuru pointed out that records show Nissan approved the disputed transactions, and that because Ghosn had not actually caused any financial damage to the company, the charges of Special Breach Of Trust, would not hold up in court.

In addition, he noted that the crimes Ghosn is now being investigated for have passed their statute of limitations – at least, for a Japanese national. But because Ghosn has lived overseas, prosecutors are arguing that the time limit has not passed.

Otsuru would not speculate on why Nissan executives went to the prosecutor’s office in hope of getting Ghosn arrested in the first place.

Still, the lawyer appeared to choose his words carefully, avoiding criticism of prosecutors per se. But he did acknowledge that the practice of keeping a suspect in detention until his or her trial, the so-called “hostage justice” system, was problematic.

“It is possible that Ghosn may not be released on bail until his trial begins,” Otsuru acknowledged.

It has been reported that Ghosn, who speaks conversational Japanese, refused to sign a confession in Japanese, and this is one of the reasons his detention continues. Long detentions and coerced signing of statements are one of the reasons Japan has a word – enzai – to describe cases of innocent people being falsely convicted. For a person who does not understand Japanese, the signing of statements in the language is doubly problematic.

Japanese prosecutors have pressed formal charges over the earliest allegation – that Ghosn under-reported his paid income in the period between 2010-2015. By January 11, they will have to indict him on the new charges or drop them. There is also a possibility that he may be re-arrested again, on other charges, which would extend his time in detention.

Odds against

The goal of the process of arrests and re-arrests is to obtain a confession that ensures a conviction. Loading the odds further against a successful defense, prosecutors who lose cases are often demoted, while judges who turn out too many not-guilty verdicts are often sidelined.

And Ghosn is not the first foreign CEO to find himself arrested, re-arrested, re-arrested again and detained for a long time by Japanese authorities.

On August 1 in 2015, Mark Karpeles, former CEO of the now-defunct Mt. Gox, a bitcoin exchange that went bankrupt after 650,000 bitcoins (worth nearly $400 million) were stolen, was arrested on minor charges of illegal electronic transfers.

Japanese police and prosecutors believed that he had stolen the coins himself. He was re-arrested twice on other charges and interrogated every day for six to eight hours. The police pressed him to admit to stealing or siphoning off the coins. He was eventually given bail in 2016.

While his trial was ongoing, US authorities captured a suspect in Greece who appears to be the real hacker of Mt. Gox, Russian national Alexander Vinnik. Vinnik is set to be extradited this year. But Japanese prosecutors have refused to allow any evidence in that case to be entered as evidence, claiming “the filings of US prosecutors are unreliable.”

Karpeles faces a verdict on March 15, on charges which have nothing to do with the original theft.

Speaking to Asia Times today, Karpeles said: “I don’t know if Ghosn is innocent or guilty, but I sympathize with him. I was asked many times to sign statements in Japanese. They were statements admitting to things I didn’t do. Some days the prosecutors would show up in the morning with statements already written — even though we hadn’t talked yet – and offered me a day off if I just signed. I did not. This may be why my detention was so long.”