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Updated: Carlos Ghosn in court – Japanese justice in the dock



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Published on January 7, 2019 |
by Maarten Vinkhuyzen

7. January 201

9 by Maarten Vinkhuyzen


Update: Ghosn has appeared in court and has denied all accusations. Confused? Read this article about Japan's rather out-of-the-way legal system. Ghosn's full statement to the judge is inserted before the original article below.


. 7 January 2019

Carlos Ghosn's Statement

Your Honor,

I am grateful to finally have an opportunity to speak publicly. I look forward to starting the process of defense against the allegations against me.

First, I want to say that I have a real love and appreciation for Nissan. I firmly believe that in all of my endeavors, on behalf of the Company, I have acted honestly, lawfully, and with the knowledge and approval of the appropriate Company executives, with the sole purpose of supporting and strengthening Nissan and contributing to its recovery Ranked as one of the best and most respected companies in Japan.

Now I want to respond to the allegations.

. 1 The Forward Foreign Exchange Contracts

When I came to Nissan and moved to Japan nearly 20 years ago I wanted to be paid in US dollars, but was told that this was not possible, and received a contract of employment that paid me in Japanese Yen. I have long been concerned about the volatility of the yen against the US dollar. I am a US dollar based person – my children live in the US and I have close ties to Lebanon, whose currency has a fixed exchange rate against the US dollar. I wanted the predictability of my income to help me look after my family.

To solve this problem, I completed currency forwards from 2002 throughout my tenure at Nissan. Two of these contracts will continue. One was signed in 2006, when the Nissan share price was around 1,500 yen and the yen / dollar rate was 118. The other was signed in 2007, when the Nissan share price was around 1400 yen and the yen / dollar exchange rate was around 114.

The 2008-2009 financial crisis resulted in Nissan's shares rising to 400 yen in October 2008 in February 2009 dropped to 250 yen (down more than 80% from its high), and the yen / dollar exchange rate fell below 80. It was a perfect storm nobody had predicted. The entire banking system was frozen, and the bank demanded an immediate increase in my collateral for the contracts, which I alone could not satisfy.

I had two tough decisions:

1. Resignation from Nissan so that I can receive my retirement pension, which I can then use to provide the necessary collateral. However, my moral commitment to Nissan did not allow me to step down at this crucial time. a captain does not jump in the middle of a storm on a ship.

. 2 Ask Nissan to temporarily take over the collateral, as long as it does not cost the company while I have collateral from other sources.

I chose Option 2. The FX contracts were returned to me without Nissan getting any loss.

. 2 Khaled Juffali

Khaled Juffali is a longtime supporter and partner of Nissan. In a very difficult time, Khaled Juffali Company helped Nissan with the financing and helped Nissan solve a complicated problem involving a local distributor. In fact, Juffali helped Nissan restructure battling distributors across the Gulf, allowing Nissan to compete better with rivals like Toyota Nissan. Juffali also assisted Nissan in negotiating the development of a manufacturing facility in Saudi Arabia and organized high-level meetings with Saudi officials.

The Khaled Juffali Company, in return, was appropriately compensated – an amount disclosed and approved by the Nissan officers responsible for these critical services, which Nissan greatly benefited from.

. 3 The FIEL Allegations

Four major companies tried to recruit me as CEO of Nissan, including Ford (by Bill Ford) and General Motors (by Steve Rattner, then-car czar under President Barack Obama). Although their suggestions were very attractive, I could not give Nissan a clear conscience while we were in the middle of our turnaround. Nissan is an iconic Japanese company that I'm very interested in. Although I decided not to use the other options, I have kept the market balance for my role that these companies would have offered if I had accepted these jobs. This was an internal benchmark that I retained for my future reference – it had no legal implications. it was never shared with the directors; and it has never been a binding commitment. Incidentally, the various proposals for non – competitive and advisory services submitted by some members of the Management Board did not reflect my internal calculations or indicate that they were are hypothetical and non-binding.

Contrary to allegations by the prosecutors, I have never received any compensation not disclosed by Nissan, nor have I entered into a binding agreement with Nissan to pay a fixed amount that has not been published. In addition, I realized that all draft proposals for compensation after retirement were reviewed by internal and external lawyers, which shows that I had no intention of violating the law. For me, the test is the "death test": If I died today, could my heirs of Nissan demand that he pay anything other than my pension? The answer is a definite "no".

. 4 Contribution to Nissan

I have dedicated two decades of my life to the revival of Nissan and the building of the Alliance. I worked day and night toward these goals, on the earth and in the air. I stood shoulder to shoulder with hard-working Nissan employees around the world to add value. The fruits of our work were extraordinary. We switched Nissan from 2 trillion yen in 1999 to 1.8 trillion yen at the end of 2006, out of 2.5 million cars sold in 1999, with a significant loss to 5.8 million cars sold profitably in 2016. Nissan's capital base tripled during the period. We saw the revival of icons like the Fairlady Z and the Nissan G-TR; Nissan's industrial entry into Wuhon (China), St. Petersburg (Russia), Chennai (India) and Resende (Brazil); the pioneering work on a mass market for electric cars with the Leaf; starting autonomous cars; the introduction of Mitsubishi Motors into the alliance; and the Alliance becomes the number one automotive corporation in the world in 2017, producing more than 10 million cars annually. We have directly and indirectly created countless jobs in Japan and rebuilt Nissan as a pillar of the Japanese economy.

These accomplishments, along with myriad of Nissan employees worldwide, are the greatest joy of my life alongside my family

5. Conclusion

Your Honor, I am innocent of the allegations made against me. I have always acted with integrity and have never been charged with misconduct in my more than 10 years of business. I was wrongly charged and wrongfully imprisoned on merciless and unfounded charges.

Thank you, Your Honor, for listening to me.


After seven weeks in prison, Carlos Ghosn is brought to justice. His lawyers can ask questions and he can read an explanation. How he should write a statement while he is withheld pen and paper, is a mystery to me.

What transcends me is the Japanese judiciary.

Now we know more exactly what he is being accused of. He is accused of failing to duly inform his shareholders of the pension payments he has made in that year. According to his advisors, he was not required to do so at the time the annual reports were written. In order to keep him in custody for longer, the acquisition was split into two periods, leaving 46 days instead of "only" 23 days in custody.

The third acquisition is an even less clear case. In 2008, Carlos Ghosn, like millions of others during the recession, received a margin call. The banking system had frozen loans worldwide, even for many creditworthy customers. Carlos Ghosn had a liquidity problem, not a solubility problem. A friend gave him a letter of credit for security. It is not known that the letter of credit has been cashed. If that had been the case, it would certainly have been mentioned. This would create a completely different situation.

The prosecution is now trying to prove that Ghosn has returned an amount equal to the value of the letter. That's crazy. The normal cost is 1-2%, and even for a friend, Ghosn is too good an entrepreneur to pay too much with such a margin.

In any other OECD country, this type of offense can be fined a few thousand dollars or more. Maybe a few hours in jail to execute a search warrant. No solitary confinement, interviews lasting several days, limited contact with lawyers and representatives or family members, refusal of sufficient food and blankets, refusal of writing material. And all for as many months as the prosecutors want to hold him.

I expect Carlos Ghosn to publish a kind of refutation of the kind "J'Accuse". Placement of the Japanese judiciary in the dock. Such treatment is considered torture in other countries. It can be classified as a cruel and unusual punishment.

And maybe he'll drop the bomb he was using to shoot Nissan boss Hiroto Saikawa. Whatever happens, there will be fireworks.

Useful Related Stories:

] "I was wrongly charged and wrongfully arrested": Carlos Ghosn in first court appearance

The arrest of Carlos Ghosn is more about Japanese criminal justice than corporate governance [19659-07] ]

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Tags: carlos ghosn, Hiroto Saikawa, Japan, Mitsubishi, Nissan, Renault, Renault-Nissan Alliance, Renault-Nissan-Mitsubishi Alliance


About the Author

Maarten Vinkhuyzen Grumpy old man. The best thing I did in my life was to raise two kids. Only elementary school completed, but if you do not go to school, you have plenty of time to read. I switched from accounting to software development and finished my career as a systems integrator and architect. My 2007 boss had two electric Lotus Elise cars to show decision-makers the future direction of energy and traffic. Since then I have been looking for a replacement for my diesel cars with electric cars.




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