Carlos Ghosn’s Lawyers Detail Theory of Why Nissan Ex-Chairman Was Targeted

par Featured articles licensed from The Wall Street Journal | le 24 October 2019

Defense lawyers ask Tokyo court to throw out criminal case, saying prosecutors brought it to help Nissan executives who feared a French takeover


Peter Landers – The Wall Street Journal

TOKYO—Carlos Ghosn’s lawyers asked a Tokyo court to throw out the criminal case against the former Nissan Motor Co. chairman, saying prosecutors brought it to help Nissan executives who feared a French takeover.

In a court filing, defense lawyers laid out for the first time in detail their theory of why Mr. Ghosn was targeted for prosecution. They said the Japanese government and Nissan teamed up to look for potential crimes by the French-educated executive to prevent him from pursuing plans to link Nissan more tightly to its alliance partner, Renault SA of France.

“The investigation is itself illegal,” said Junichiro Hironaka, the lawyer leading Mr. Ghosn’s defense.

The filing, dated Oct. 17, said prosecutors relied on biased Nissan executives who were determined to find improprieties by Mr. Ghosn while casting a blind eye to their own wrongdoing. Mr. Hironaka said he had evidence of involvement by officials in the Ministry of Economy, Trade and Industry but declined to release it.

The Tokyo district prosecutors’ office and Nissan declined to comment. The ministry said the defense’s allegations about it are groundless.

Prosecutors have said their investigation was proper and that they are confident their charges are accurate. Nissan has said Mr. Ghosn committed “significant misconduct” while leading Nissan. It has said it is fully cooperating with prosecutors.

Mr. Ghosn was arrested Nov. 19. After spending more than four months in jail in two stints, Mr. Ghosn was released on April 25 on the condition that he remain in Japan. He is living in Tokyo, and his lawyer said he was attending all the pretrial hearings in his case. The lawyer said he has advised Mr. Ghosn not to comment publicly because any statements could be used against him in court.

‘The investigation is itself illegal,’ said Junichiro Hironaka, the lawyer leading Mr. Ghosn’s defense.

Mr. Hironaka said the Tokyo District Court has expressed a desire to begin the trial by April, but he said that might be difficult because repeated disputes over evidence have bogged down the pretrial process.

“There’s a whole lot they don’t want to show us,” he said of prosecutors.

In the U.S. legal system, federal prosecutors must provide the defense with evidence that may show the defendant’s innocence. Until this century, Japan had no such principle.

A Japanese legal change passed in 2004 expanded the rights of defendants to seek potentially exculpatory evidence, but the rules governing the process are undeveloped, Mr. Hironaka said. He criticized prosecutors for withholding what he said were some 6,000 emails and other electronic documents held by Nissan.

In addition to casting doubt on prosecutors’ motives, the defense filing gives Mr. Ghosn’s detailed response to the charges against him. He is accused of failing to report more than $80 million in deferred compensation on Nissan financial statements, sending Nissan money to a Saudi businessman who had helped him deal with potential losses on a personal foreign-exchange contract and diverting Nissan payments to an Oman distributor for his personal use.

On the compensation issue, the filing said that Mr. Ghosn decided to take a pay cut in 2010, when Japan started requiring disclosure of individual executives’ compensation, because he wanted to avoid an “uproar based on misconceptions” in Japan. Japanese executives at big companies traditionally enjoy a lifetime employment guarantee but are paid far less than Western counterparts.

Mr. Ghosn ordered an aide to record in writing each year the amount he “would have rightfully been able to receive” if he were paid by global standards and the difference between that amount and his pay, the defense said.

Prosecutors are expected to use such documents to argue that Mr. Ghosn was awarding himself deferred compensation each year and should have reported the money on Nissan’s financial statements. The defense said there was no agreement to pay Mr. Ghosn the amount he thought he should have earned and that the records were reference materials for potential future compensation discussions.

On the Middle East accusations, the defense said Nissan made payments to its Saudi and Omani distributors for business reasons and followed company procedures. None of the money went to Mr. Ghosn or benefited him personally, it said.