Ghosn’s escape puts Japan justice system in a tight spot - Financial Times

Carlos Ghosn’s freewheeling press conference has put Japan on the back foot.

Following his dramatic escape from Tokyo to Beirut, the former Nissan chairman told a global audience that he was an “easy target” for Japan’s justice system because he was a foreigner.

The implications for Japan of the accusation are serious. Foreign executives already working in the country — and those that are slated to arrive on the back of an anticipated rise in cross-border M&A and private equity deals — will have been watching the case closely to see whether the legal system is as fair as Tokyo professes.

Mr Ghosn may have had legitimate concerns over whether he would receive a fair trial on the four charges of financial misconduct he faces — and denies. But his escape means the opportunity to subject the case Japanese prosecutors say they have built against him to global scrutiny has been lost. 

Japanese officials have been defending their justice system and obtained an international request for Mr Ghosn’s arrest via Interpol. But the world has been captivated by the eloquent fugitive and his claim that he was the victim of a political plot to block merger plans between Nissan and its French partner Renault.

Now both sides will struggle to show where the truth lies.

The 65-year-old strongly rejected charges that he failed to report his post-retirement compensation promised by Nissan, and that he used company money for his personal benefit. But the company documents that were displayed on a screen at his Beirut press conference were hard to evaluate — and Mr Ghosn is still preparing to distribute them to journalists. 

The former Nissan boss, who admitted he should have retired earlier, also failed to fully address questions over alleged ethical breaches during his almost 20-year reign at the top of the company. More than two weeks since his flight from Tokyo — and over a year since Mr Ghosn was first arrested — the biggest questions of this entire saga remain unanswered.

There is reason to believe, according to documents seen by the Financial Times, that Nissan executives were in close touch with senior government officials regarding Mr Ghosn’s merger plan with Renault. But there has been no evidence showing Japanese government officials responding directly to Nissan’s grievances and voicing support for bringing Mr Ghosn down. 

Mr Ghosn’s press conference did not shed any new light on this question since — to avoid further inflaming diplomatic tensions between Lebanon and Japan — he declined to name officials that he believes were involved in the plot against him. The government denies any involvement in Mr Ghosn’s downfall — as do current and former Nissan executives.

The Japanese government is in a dilemma. It has put its muscle into defending a judicial system with a 99 per cent-plus conviction rate — a figure officials claim reflects the fact that only the most winnable cases reach trial. But the more it does so, the greater the risk it allows Mr Ghosn to set the agenda.

In the days since Mr Ghosn’s news conference, the Japanese government’s response has also been hit by a dreadful gaffe from Masako Mori, the justice minister, who said the former car supremo should “prove” instead of “assert” his innocence. That gave ammunition to those who accuse Japan of failing to respect the principle of presumption of innocence.

Will foreigners take Mr Ghosn’s advice and leave Japan? Not necessarily. Some people are starting to believe that his anger against the justice system and alleged conspiracy has morphed into a wider anti-Japan message.

But the country must do a better job of accelerating the recent reforms to a judicial system that had come under criticism from its own citizens and lawyers long before Mr Ghosn’s 130-day stint in jail.

The reforms, for example, include requirements that the police and prosecutors videotape their interrogations, while the Tokyo District Court has started granting more bail.

While Mr Ghosn decided to flee Japan after learning that his trial could drag on for years, the pre-trial hearings he attended were part of procedures to narrow the scope of the charges in order to expedite the trial proceedings.

Japan’s reaction to Mr Ghosn’s embarrassing escape should not be to simply reverse this trend by toughening its stance on granting bail.

Mr Ghosn’s advice to foreigners may be to “get out” of Japan. But the country can stop this by showing businesses that it can do better with its legal system.

kana.inagaki@ft.com

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Ghosn’s escape puts Japan justice system in a tight spot - Financial Times
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