Where is the Nissan chief Carlos Ghosn?

The huge story in Japan this month is the arrest of the former Nissan CEO and chairman Carlos Ghosn. But where is now? Why hasn’t he be photographed or filmed? And has he actually been charged with a crime?

Piecing together the news coverage makes it fairly easy to answer the first question about Mr Ghosn’s whereabouts.

According to Reuters, he is inside the Tokyo Detention House in Katsushika Ward. TV reporters have set up positions outside the building to do “pieces to camera” from there.

Reuters says: “The detention center, a tower-like structure in eastern Tokyo, is where the leader of the Aum Shinrikyo doomsday cult, which carried out the 1995 sarin gas attack on Tokyo subways, was executed by hanging this year.”

The death row part of the facility is separate to the one for people being investigated for crimes. But it does add another lurid detail to the sudden and dramatic change in circumstances, since Mr Ghosn flew into Tokyo on September 19th.

Asahi Television must have received a tip that something was happening at the airport. Somehow, it managed to obtain film of men in suits marching up the staircase into Mr Ghosn’s private jet. They quickly pulled down the shutters to prevent people seeing what was going on inside.

AFP agency suggests that Mr Ghosn spent several hours inside the plane with prosecutors – initially on a voluntary basis – and was later arrested.

AFP also says that at around 5pm, investigators raided Nissan’s plush Yokohama headquarters and another team stormed his luxurious apartment, in the affluent Tokyo neighbourhood of Motoazabu. By 5:30 pm, word was out and hoards of camera crews swarmed around the building.

So far as I can tell, the reason that nobody’s managed to get any film or pictures of Mr Ghosn since his arrest is that he’s only been in his cell in the detention centre and the press can’t find a way into the building. This, of course, has prevented him from taking the opportunity to answer the claims of his accusers.

So far, Mr Ghosn has been denounced by his company but he has not been charged. This is due to a strange fact about Japanese law of which I was previously unaware. The Japan Times says that: “Japanese law permits the detention of suspects for up to 23 days before they are charged.”

This is a contrast to the situation in the UK, whereby the police can hold a person for up to 24 hours before they have to charge them with a crime or release them – although there are some exceptions for cases involving murder and terrorism.

It suggests that the legal system in Japan seems to press arrested people into confessing to crimes before there is any action in a courtroom. In this context, I am sceptical about reports on NHK that Mr Ghosn has “denied the charges against him” as it seems there are no charges to deny – yet.

Mr Ghosn will need a good lawyer to explain to him what is happening. The Asahi Shimbun claims that Motonari Otsuru, a former public prosecutor, has been hired to defend him.

Mr Otsuru will soon have the arduous task of becoming the public representative of his client before the press. And there are hundreds of journalists in Tokyo and around the world who are keen to hear what Mr Ghosn has to say.

Luxury homes, lavish dinners and Carlos Ghosn’s shocking arrest

I was shocked when I heard that the boss of Nissan, Carlos Ghosn, had been arrested this week. The company says he’s being investigated for “numerous significant acts of misconduct.”

I have interviewed Mr Ghosn several times for the BBC but of course, I did not have any reason to ask him questions about his salary or his spending habits.

Luxury lifestyle

According to NHK, Mr Ghosn used company money to buy luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam. NHK says they cost tens of millions of dollars and there was no legitimate business reason for him to buy them.

NHK also says that Mr Ghosn used hundreds of thousands of dollars for family trips and dining. When he was arrested on Monday, it was on suspicion of under-reporting his income by about 44 million dollars over a five year period.

The Managing Director of Intelligence Automotive Asia, Ashvin Chotai, expressed his shock on the BBC.

“If these allegations are true, there are appears to be a serious breach of Japanese financial laws. We are not talking about tax fraud,” said Mr Chotai.

“I have to say though, this is not the first time that a CEO of a Japanese company has been brought up on such a charge and in previous cases there haven’t been arrests. But there is more media and public interest in this case because Carlos Ghosn is a foreigner and a very high profile CEO,” Mr Chotai told the BBC.

Coup rumours

There is a rumour that the actions again Mr Ghosn might be a coup by company insiders who were resentful of his big salary.

The Financial Times notes that in 2010 Mr Ghosn became the highest paying executive in a country where reminumeration tends to be much lower than global stands.

My Ghosn’s supporters could of course praise his special talents and insights – and the way he was able to turn the company around in the late Nineties.

He was also deeply involved in the running of the other companies in the automotive group, Renault and Mitsubishi.

Resentment lingers

Nevertheless, hard-working Japanese executives are often suspicious of rich foreigners working in their industries.

Does the money they receive really make them better at their job? Wouldn’t they understand the company better if they rose through the ranks, like ordinary Japanese managers?

Ashvin Chotai says: “It’s very different to imagine Nissan without Carlos Ghosn. I expect will see a new era going forward. From now on, it will probably be run more along the lines of other Japanese companies, such as Toyota.”

Japan would make the perfect ally if Trump wants to raise the stakes with China

Asia’s leaders, including Japan’s prime minister, Shinzo Abe, are still trying to work out how best to respond to the disruptive, America-first policies of President Donald Trump. The November Midterm elections in the United States did not provide any solutions to their dilemma. Indeed, the outcome of the polls suggest that Mr Trump is almost certain to run for re-election as president in 2020. The Japanese must therefore continue to try to maintain an alliance with Mr Trump, difficult though that will be.

The elections allow Mr Trump to continue as America’s leader, with considerable support from his Republican party, which retains control of the Senate, even though a swing to the Democrats has enabled his opponents to take control of the House. Yet when it comes to trade policy, Mr Trump enjoys considerable executive power which he can wield autonomously. That is especially significant when it comes to China.

Tariffs on China

Mr Trump has imposed tariffs of about $250 billion on Chinese imports into the United States and has threatened to increase that figure dramatically.

China is not backing down and nor is Mr Trump. His hawkish attitude delights the conservative wing of the Republican party but there is also backing for his approach among many Democrats.

“I think the outcome of the Midterm elections strengthens Trump’s hand on China,” Professor Linda Yueh from Oxford University told me. “He may well press a bit harder and he could gain some bipartisan support. He’s considering truly massive tariffs in China next year. But will he do that at a time when growth in the US economy is slowing?”

Japan’s dilemma

For Japan, the US-China trade war creates a dilemma. Japanese businesses dislike the disruption it causes to their manufacturing processes. There is also resentment that the US maintains tariffs on Japanese steel exports to the United States, despite Mr Abe’s request to Mr Trump lift them.

These tensions come at a challenging time. The economy shrank in the third quarter of 2018 by an annualised rate of 1.2%. A Reuters poll of economists in Tokyo suggests they see the US-China trade war as the greatest threat to the Japanese economy next year.

The conservative perspective

Despite the risk, conservatives in Japan relish Mr Trump’s challenge to China’s enormous economic power and its increasing political influence. Mr Trump accused the Chinese of interfering in the election process in the United States by pressing voters to back his opponents.

“China was watching the race closely,” Professor Yueh told me. “The Chinese were putting pressure on them to stop the trade war, saying that there would be no winners,” said the professor.

One danger for Japan is that emboldened in his fight with China, Mr Trump becomes increasingly protectionist. The President has ordered an audit of all the countries which have a trade surplus with America, including Japan. “He believes that having a trade surplus means you’re not playing by the rules,” says Professor Yueh.

Free trade principle

Yet there is another option. Instead of allowing a narrow America-first approach to prevail, Mr Trump could recommit the Republican Party to its principle of free trade. In doing so he could reverse his decision to exclude the United States from the TPP international trade agreement, which is strongly supported by Japan. This would act as a counterbalance to Chinese influence.

Shinzo Abe can still claim TPP as a major political achievement, even if America remains outside it for the time being. When the partnership comes into force at the end of this year it will mark a rare victory for global trade liberalisation, with Japan very much as the driving force.

Am I too optimistic? Well, the Economist is upbeat, too!


This week, I was asked whether I’m too optimistic about Japan.

Podcast host Ziv Nakajima Magen has been reading through my recent blog posts on Japan Story and noticed that they are often upbeat.

Quite reasonably, he asked me: “Where do you get this optimism? Is it 100% authentic, or are you maybe just playing devil’s advocate a little bit to the sensationalist, over-dramatic tendency of international media, as far as it comes to Japan and some of the issues it faces?”

I told Ziv that I sometimes feel it’s my duty to highlight the positive aspects of Japan as the media, quite understandably, tends to concentrate on the bad news. But I also said that as a journalist, I try to keep an open mind. I reminded him that I’m entirely independent – I’m not paid by anyone in Japan to sing the country’s praises in a blog.

Sunrise in Tokyo

Apparently, I’m not alone in keeping an eye out for the good news.

This week, I read a very optimistic analysis of Japan in the Economist magazine. It was in the Finance and Economics section under the byline Buttonwood, which suggests it was written by Philip Coggan. The headline was “Sunrise in Tokyo.”

The piece praised Japan’s “healthy” economy and was positive in its view of the Abenomics programme of Prime Minister Shinzo Abe.

It said: “Deflation has ended. Nominal GDP has been growing steadily. And the job market is buoyant. Unemployment has fallen to 2.3%. The ratio of vacancies on job seekers is the highest since the early 1970s.”

Womenomics

It also looked at the policy of Womenomics, designed to bring more women into positions of senior responsibility. That usually provokes a sceptical response in the international press.

For example, the New York Times magazine recently asked “Why does Japan make it so hard for working women to succeed?” The author of that piece, Brook Larmer, said Japan “has remained stubbornly regressive”. He wrote: “Japanese women, to a degree that is striking even by the lamentable standards of the United States and much of the rest of the world, have been kept on the margins of business and politics.”

Yet the Economist article states that: “More women than ever are in the workforce. The female participation rate is higher than in America and above average for the OECD.”

Rising productivity

Japan is often said to have an inefficient working culture. For example, Reuters said this week that it has “the lowest productivity among Group of Seven countries.”

The article in the Economist does not challenge that claim directly but it counters that: “Output per hour has recently grown faster in Japan than in other G7 country, according to the Conference board, a research group.”

Challenges remain

The Economist does not ignore the challenges facing Japan, such as its shortage of labour and its ageing population. But it says that companies are responding to these issues by expanding into foreign markets and improving their productivity.

The Economist loves to hand out advice, telling governments and business leaders what to do. Yet on this occasion, it is quite restrained, apart from its implied praise for Abenomics. The piece suggests that Japan is quietly solving its problems by itself.

So, my optimistic view of Japan is not quite as esoteric as it sometimes seems. Others see it as a land of opportunity, too.