This is part 1 of a series.
While Nissan, Tokyo prosecutors and others continue to doggedly pursue litigation against fugitive ex-auto executive Carlos Ghosn – in Japan, in France and the Netherlands, in the United States and in his home country, Lebanon – Ghosn has remained relatively quiet since his daring escape from Japan’s “hostage justice” system two years ago this December.
That could change – soon.
He granted Asia Times and Wards Automotive a second interview on July 12 to discuss the raid on his residence in Beirut on the day of his Tokyo arrest, November 19, 2018. The interview expanded into other areas where Ghosn is now involved in litigation, mostly with Nissan, his former company.
What we’ve learned, from that interview and by following up with lawyers and witnesses, is that Ghosn has not been sitting idly for the past 20 months. He has been slowly and meticulously gathering evidence to prove his innocence and restore his good name – an obsession with him.
More to the point, we learned he is planning a counter-offensive that is big and bold. He appears to have realistic chances of succeeding – better chances, of course, in some of the ongoing litigations than in others.
We provide hints in this article, highlighting some of the facts we have uncovered. Let the lawyers for both sides speak whenever they’re ready.
Mystery laptop
We start with the mysterious “laptop in Lebanon.”
The first public word that Tokyo prosecutors were using a personal computer to build their case against Carlos Ghosn was a May 2019 report in the foreign press saying a laptop had provided damaging evidence about the arrested executive’s alleged business dealings in the Middle East.
The former CEO of both Nissan Motor Co and Renault SA – Nissan’s largest shareholder – couldn’t have responded to the report even if he had wanted to as he had been rearrested, and imprisoned for the second time, only five weeks after trying to hold a news conference.
While the stated grounds were serious – an allegation that he had siphoned off millions of dollars from a Nissan distributor in Oman – the timing suggested the rearrest represented a message from the Tokyo Public Prosecutors’ office: Don’t talk to the press and don’t dispute the charges.
What the press report did not mention is that there had been two precision-planned and precision-executed raids in Lebanon on November 19, 2018, the day of Ghosn’s arrest in Tokyo. If the reporter had been able to speak with the imprisoned Ghosn he would have been told that the laptop was stolen property.
The facts: On the day of the raids, Hari Nada – Ghosn’s main accuser, who headed the CEO office at Nissan and had entered into a plea bargain the prosecutors three weeks earlier – emailed the office manager shortly after noon Lebanon time, within minutes of Ghosn’s arrest in Japan six time zones away, instructing her to grant a team from Nissan unrestricted access to the office.
The manager wasn’t on site but immediately drove to the office, where she met five individuals including a Nissan lawyer from Japan.
The team proceeded to remove office files, a portable computer and a mobile device. Nada had instructed the manager to assist the team in removing “Nissan” property. Ghosn says they also took private information regarding him and his former lawyer and friend, Fadi Gebran, who had passed away the previous year.
Then, without her consent according to her testimony in an affidavit, they also took a hard drive belonging to Gebran, her former employer, who had many clients including Nissan, Renault and Ghosn. The hard drive, which was not Nissan property, was being managed by the office manager, who worked for Nissan. It contained “many thousands” of legal documents, emails and Gebran’s database, we were told, all said by Ghosn’s side to be protected under Lebanese law by the attorney-client privilege.
Nissan’s raid team took the hard drive and other items without a warrant, Ghosn’s camp alleges.
The raid team then is alleged to have proceeded to Ghosn’s residence in an armed convoy of vehicles with tinted glass. The raid team pressured the manager to help them gain access to Ghosn’s residence, which had been included in Nada’s instruction. We have not seen the email but were told it exists. They took papers, a computer and a telephone.
Shortly after the raids, both carried out by foreign nationals who had entered Lebanon, Ghosn’s lawyers filed a criminal complaint. That case is still open.
Three members of the five-man team have been identified including at least two lawyers – one from Nissan headquarters in Yokohama and a second from the Dubai office of Latham & Watkins, Nissan’s main law firm.
The issue of the laptop, hard drive and Ghosn’s personal papers – and how Tokyo prosecutors got their hands on them – has largely been forgotten among the many other twists and turns in the case over the past 30-plus months, notably including Ghosn’s dramatic escape in 2019.
But Ghosn hasn’t forgotten, and the criminal case in Lebanon, which Ghosn’s lawyers filed shortly after his arrest, remains active and part of his global legal strategy to clear his name. The case stalled in Lebanese court in part because of insufficient evidence. Ghosn was incommunicado, in solitary confinement, and couldn’t inform his lawyers what sort of documents had been taken.
Now, with additional evidence gathered, he’s planning to revisit the case. “They broke Lebanese law for sure,” he said in our latest interview (a follow-up to an interview in May that was the focus of an earlier article, “Carlos Ghosn speaks: ‘Secret pay never happened‘”).
“They took archives and documents belonging to me,” Ghosn told me. “And they were not the police.” At least they were not Lebanese police.
Tennessee waltz
The automaker behaved similarly at Ghosn’s Amsterdam and Rio de Janeiro apartments. In Rio de Janeiro, according to a whistle-blower’s account, people acting on behalf of Nissan (in an operation initially conceived at Nissan North America Inc headquarters in Franklin, Tennessee) removed content from what Ghosn says was his personal safe.
Tennessee finds itself at the center of the broader Carlos Ghosn story. The Nashville metropolitan area is the site of Nissan’s first US plant, built in Smyrna in 1983.
It’s not well known that the North American headquarters in Franklin, another Nashville suburb, is where the automaker kept executive compensation records that are material to the Ghosn and Kelly cases in Japan. Those records were removed, according to a whistle-blower account, just as the US Securities and Exchange Commission was launching its investigation into the Ghosn compensation issue.
Greg Kelly, who is now awaiting the verdict in his trial in Tokyo for allegedly helping Ghosn hide future compensation, resides in yet another Nashville suburb.
And the Federal Court in Nashville is the site of a class-action lawsuit, filed by Nissan investors who want to recoup some of their losses as Nissan’s share price remains 40% below where it was on the day Ghosn was arrested. Sources familiar with the case feel there is considerable risk for Nissan if it continues to fight rather than settle. Evidentiary discovery rules in the US lean more toward openness than those in Japan, for instance.
In France, a Nissan raid team tried and failed to enter Ghosn’s Paris apartment. Ghosn explained that he had changed the locks two weeks earlier and hadn’t left the new keys with the concierge. Thus they couldn’t enter.
“The only place they came with a warrant was my apartment in Tokyo, where my daughter was staying at the time,” he said. And from his Tokyo apartment, the prosecutors took both company-related and personal records, said Ghosn.
Hidden documents
Because Nissan continues to aggressively pursue Ghosn in litigations in France, the Netherlands and the United States, as well as with Interpol, how it procured documents and other records being used in those cases is important. The rules of discovery may be on Ghosn’s side – everywhere but in Japan. (Lebanon falls in a separate category because Ghosn, not Nissan, is alleging criminality.)
In Japan, the situation became so bad for Ghosn that two months before his December 2019 escape his lawyers filed a brief in Tokyo District Court complaining that the prosecutors still hadn’t completed the disclosure of evidence involving the case. That was on October 17, almost 11 months to the day after his arrest.
The New York Times reported that the prosecutors also had limited disclosure to “viewing” of evidence and had deleted electronic data subject to disclosure “at Nissan’s request,” while declaring “thousands of files off-limits … that Nissan considered too sensitive.”
We were told that Ghosn’s lawyers didn’t start receiving evidence they were entitled to see through the discovery process until September. He was arrested on November 19 the previous year.
In Kelly’s case, we learned that the prosecutors delivered boxes of evidence after key witnesses had testified.
Nissan clearly seems on the defensive – citing technicalities, even in its communications with news media, regarding the release of documents that Ghosn says would prove his innocence.
Readers who have followed the Ghosn saga closely may recall that Nissan itself pleaded guilty in Japan to making false financial disclosures. In the Tennessee case, the automaker has argued that its own guilty plea in Japan doesn’t apply to the US, although the charges are essentially the same. Ghosn’s lawyers disagree and are requesting that Nissan turn over documents from its criminal case in Japan.
During Ghosn’s meetings with French prosecutors in Beirut in late May and early June, his lawyers have challenged parts of the evidence and want those parts ruled “null and void” because they haven’t been given a chance to authenticate them.
Relying heavily on documents taken in the November 2018 raids on Ghosn’s residences and the hard drive from his former lawyer (from the latter, “many thousands of documents,” we were told), Ghosn’s lawyers believe they have uncovered intentional omissions of exculpatory evidence or evidence that has been incorrectly labeled, thus raising questions of tampering.
Of particular importance in all of the cases because it is considered the key piece of evidence to prove Greg Kelly’s innocence and thus Ghosn’s, by extension, is the June 2015 retirement proposal signed by Kelly and Hiroto Saikawa, Nissan’s CEO at the time of their arrests.
That document, in particular, is not merely exculpatory, lawyers say; it blows a hole in both Nissan’s and the prosecution’s timeline regarding Ghosn’s and Kelly’s alleged guilt.
Kelly wasn’t even a board member until June 2012, two years after the automaker allegedly began withholding income for Ghosn. And only representative directors – initially Ghosn and Toshiyuki Shiga, Nissan’s chief operating officer; then in 2011, Ghosn, Shiga and Hiroto Saikawa, the automaker’s future COO and CEO – could have recommended changes in executive compensation to the board.
Despite the significance of the document, the prosecutors’ office won’t make it public. “‘No comment’ is our answer,” said a Justice Ministry spokesman in an email responding to our request to release the document.
Ghosn no longer possesses the signed original. It was taken by the prosecutors in Japan on the day of his arrest and not revealed until this spring during the Kelly trial. He had a copy, he said, in Beirut – either at his office at the Nissan distributor or his residence. That was taken in one of the Beirut raids.
But a copy may soon become available outside Japan which, if released to the public according to four people who said they have seen it, could substantially clear both Ghosn and Kelly of the first two charges of concealing 9.3 billion yen ($85 million) in undisclosed retirement income.
It wasn’t undisclosed income because it wasn’t income, both Ghosn and Greg Kelly said during trial testimony in Tokyo. Two other sources who have seen the proposal have backed them up on that in interviews but on condition they not be identified in this article.
Rather than a contractual promise of income to Ghosn, it was a proposal that he continue working with Nissan, perhaps in a consulting role, whenever he might step down from management.
In fact, it came out at Kelly’s trial that there were three such documents, according to the Associated Press, which covered that trial. The three were dated 2011, 2013 and 2015.
Prosecutors without borders
To the extent that Nissan’s Nada was cooperating with the prosecutors to carry out the raids, Ghosn argues, that shows that the prosecutor’ office – which falls under Japan’s Ministry of Justice – conducted police operations in four foreign countries: Lebanon, Brazil, the Netherlands and France, apparently unsanctioned by local authorities.
Nada reached out to the prosecutors’ office in September 2019 and then secured his plea deal on October 31, according to a new book by Hans Greimel and William Sposato, Collision Course: Carlos Ghosn and the Culture Wars that Upended an Auto Empire.
That would have been 19 days before Nada personally directed the sting operation that led to Ghosn’s and Kelly’s arrests and eventual removal from management.
In Ghosn’s case, the former chief executive was taken from his plane at Tokyo’s Haneda International Airport to the immigration counter and office and then straight to the Tokyo Detention House, where he would spend the next 109 days in solitary confinement.
In Kelly’s case, according to Ravinder Passi, Nissan’s former global legal counsel, Nada lied to him to lure him back to Japan from semiretirement near Nashville and into the hands of the prosecutors.
“Why would you do something like that?” asked Passi, who said he only learned of the plan several days in advance, assured by Nada and a Latham & Watkins lawyer that criminality was involved.
In the Beirut case, records show that Nada traveled to Beirut on October 24, 2019, ostensibly to gather information from the manager of a property management company, Phoinos Investments SAL, about the automaker’s business in Lebanon. More likely, says a source close to Ghosn, Nada was there to gather information for the upcoming operation.
Phoinos is a Nissan subsidiary. The manager was employed as a Nissan consultant, but she wore multiple hats: She also had been the personal assistant of Ghosn’s late lawyer, Fadi Gebran, and had been entrusted with his legal records including the hard drive. (Fadi Gebran likewise didn’t just represent Ghosn. He represented both Nissan and Renault.) She is the star witness, and in a sworn statement testified that she hadn’t given the Nissan team permission to take Gebran’s hard drive.
Nada’s trip took place one week before he finalized his plea deal.“Most of the information they took was used against me,” said Ghosn via our July 12 Zoom interview from his home in Beirut. “The Tokyo prosecutors office also sent the stolen information to French prosecutors.”
If he’s right about that last point, it raises questions about the admissibility of the information in France’s investigation into Ghosn’s alleged dealings with a distributor in Oman, Suhail Bahwan Automobiles LLC, and RenaultNissan BV, a subsidiary in the Netherlands.
Beyond Lebanon and Tennessee
Lebanon and Tennessee are not the only places where Ghosn and Nissan are fighting it out in court. In France and the Netherlands, Ghosn is embroiled in separate tax, wrongful dismissal and shareholder cases.
In Japan, Nissan has filed a largely symbolic “breach of fiduciary duty” damages lawsuit aimed at covering fines it paid to the Financial Services Agency, resulting from its guilty plea to the charge of underreporting Ghosn’s supposed retirement income.
Against this backdrop, Ghosn continues to work to have his name removed from the Interpol “red notice” list (to be discussed in a later installment of this series).
Of course, Ghosn wouldn’t be able to aggressively defend himself in any of these litigations had he not escaped in December 2019 from Japan’s “hostage justice” system and an almost certain guilty verdict whenever his first trial – the prosecutors were planning four, not just one – might eventually have gotten underway.
Now 67 and living in exile in Lebanon, he may or may not win these cases. It is certainly too early to say that he will lose them – or that he won’t qualify for massive financial damages as more facts emerge about the coup that toppled him and its motivations.
Part 2 of this series will focus on the costs to Nissan and its shareholders of its executives’ coup against Carlos Ghosn.
Roger Schreffler is a veteran correspondent for Ward’s Automotive and a former president of the Foreign Correspondents’ Club of Japan.