With Charges Still Not Laid, Ghosn to Be Treated 'As a Burglar'

Disgraced industry phenom Carlos Ghosn, who still holds the title of Nissan chairman and Renault CEO (though likely not for long), could remain in custody for some time as Japanese authorities take their time in laying charges.

The news of Ghosn’s arrest amid allegations of severely underreported income fell like a hammer Monday morning, shaking the stocks of the automakers Ghosn guided since their tie-up at the end of the last century. From an opulent private jet to a sparse Tokyo jail cell, the auto titan’s journey this week surprised everyone.

According to The New York Times, Ghosn will spend at least 10 more days in custody, though Japanese law allows for suspects to be held for 23 days in the absence of charges. Authorities arrested Ghosn shortly after his jet arrived at Tokyo’s Haneda airport on Monday. An internal investigation conducted by Nissan fingered Ghosn and Greg Kelly, Nissan board member and former HR manager, in conspiring to underreport compensation levels to Japan’s Ministry of Finance.

The Tokyo prosecutors’ office claims the two men underreported Ghosn’s pay for four years (2011 to 2015), lowballing his compensation by $44.5 million — or half of his actual compensation.

After being led off the corporate jet, Ghosn was likely moved to a 50-square-foot room outfitted with a futon laid on the floor, as is Japanese practice, and stripped of belt, tie, and long socks. He’s allowed a small amount of clothes that can’t be fashioned into a noose.

“There will be no special treatment for Ghosn,” Tsutomu Nakamura, a former prosecutor told the NYT. “He will be treated in the same way as a burglar.”

By the end of the week, Ghosn will likely find himself stripped of more than just clothes — the titles under which he turned the Renault-Nissan Alliance (joined in 2016 by Mitsubishi) into the world’s largest automaker stand to be revoked by corporate boards. Nissan’s board will gather Thursday to vote on a motion to out Ghosn as chairman. Renault, on the other hand, seems to be weavering on Ghosn’s fate.

As reported by Bloomberg, there’s two sides at play. Some Nissan board members feel there’s a coup afoot, sources say, while others feel Ghosn simply got greedy. At Renault, the struggling automaker saved by Ghosn, top brass are taking a wait-and-see approach as the drama plays out in Japan. France holds a 15 percent stake in Renault.

Over the last couple of years, Ghosn had taken steps to move away from the companies he married, giving up the CEO position at Nissan. His successor, Hiroto Saikawa, was quick to denounce the fallen executive’s alleged actions, claiming the company had placed too much power in the hands of one man.

“Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,” Saikawa said Tuesday at a press conference at Nissan’s Yokohama HQ. The CEO said his top priority was minimizing the fallout of the allegations on his company and its workforce. In Tokyo, Nissan shares tumbled following news of the arrest.

Mitsubishi’s board will reportedly meet next week to decide whether to oust Ghosn as the automaker’s chairman. Meanwhile, Japanese state TV aired footage of Toshiyuki Shiga, Nissan board member and former chief operating officer, entering the Tokyo prosecutors’ office to submit to voluntary questioning.

[Image: Nissan]