Victim of plea bargaining? Carlos Ghosn’s arrest based on murky evidence, former prosecutor says

by Magdalena Osumi and Satoshi Sugiyama

Staff Writers

A prominent lawyer and plea deal expert said Monday that Nissan’s ex-Chairman Carlos Ghosn, suspected of violating financial law, may have fallen victim to Japan’s recently established plea bargaining system, leading to an arrest despite a lack of clear incriminating evidence.

Ghosn, who was dismissed Thursday as chairman of Nissan Motor Co. and removed from the same position at Mitsubishi Motors Corp. Monday, was arrested on Nov. 19 on suspicion of underreporting his income by around ¥5 billion for five years through fiscal 2014. He received nearly ¥10 billion over that period. He is also suspected of misusing company funds to pay for a luxurious lifestyle.

But Nobuo Gohara, a former prosecutor and now lawyer at Gohara Compliance and Law Office in Tokyo, believes the legal grounds for Ghosn’s arrest are murky.

“I think it’s a common procedure for prosecutors to collect enough hard evidence and consult with legal authorities, but this time around it was not clear what the hidden payment was,” Gohara said at a news conference at the Foreign Correspondents’ Club of Japan in Tokyo.

He called the investigation that led to Ghosn’s arrest “violent” and “haphazardly done.”

Gohara said that prosecutors arrested Ghosn only on the assumption that he had violated the Financial Instruments and Exchange Law. He added that it was highly likely the sum missing from Ghosn’s securities report — leading to his arrest as well as the arrest of his aide Greg Kelly — was the equivalent of money Ghosn was entitled to receive after leaving the company.

“If Mr. Ghosn’s crime stems from the fact that he and other people failed to accurately describe the scheduled payment in a security report, there’s no such requirement,” he said.

Gohara also suggested that the underreported amount could have been from a stock deal known as stock appreciation rights, or SAR. But if that were the case, he said, Nissan’s other executives, including CEO Hiroto Saikawa, would also be held liable since they would also have participated in the arrangement.

In Ghosn’s arrest, prosecutors used Japan’s plea bargaining system that was introduced in June through legal amendments. It allows for the acceleration of court proceedings for crimes such as bribery, embezzlement, tax fraud and drug smuggling.

Under the system, defendants can plead guilty to lesser offenses in exchange for more lenient sentencing or the dismissal of other charges. It also allows criminal suspects to negotiate deals with prosecutors in exchange for information on other suspects, which Gohara says can encourage people to give false statements.

Gohara hinted that it’s possible Nissan insiders who were at odds with Ghosn might have orchestrated a plot to push him out.

Gohara also offered wider criticism of Japan’s criminal justice system, saying that the principle of being innocent until proven guilty is not always upheld.

Ghosn has reportedly denied the allegations against him.

“Ghosn can only defend himself through the trial, but even if he’s innocent it will take time to prove it,” Gohara said. “The scandal has already damaged his reputation and he has lost his influence as he has already been dismissed.”