THE LATEST ON CARLOS

“…the episode ought to trouble anyone concerned with due process and corporate governance in Japan.” 

The Editorial Board, The Wall Street Journal

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DAYS SINCE CARLOS GHOSN WAS DETAINED

Carlos Ghosn is being held indefinitely by Japanese authorities
without his daily medications, kept in isolation in an unheated cell. 

He has limited access to his lawyers and no access to family, while Japanese prosecutors have unlimited ability to isolate, interrogate, and intimidate him. 

That's because in Japan you’re guilty until proven innocent, and prosecutors routinely prolong detention to coerce confessions.

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“…with the world watching, the international credibility of Japanese law — not just the future of the Renault-Nissan alliance — now rests on justice being seen to be done.”

 Robin Harding, Financial Times

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“He has been confined to a small unheated jail cell in Japan since mid-November, where he continues to be interrogated by Japanese prosecutors…”

Joe Nocera, Bloomberg

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“He has been interrogated without his lawyers being present and has been held in a detention center for more than two weeks without being formally charged with any crime.”

Alan Dershowitz, The Hill

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November 26, 2018

Carlos Ghosn removed as Mitsubishi Chairman

November 22, 2018

Carlos Ghosn removed as Nissan Chairman

November 19, 2018

Carlos Ghosn unexpectedly arrested upon landing in Tokyo

December 10, 2018

Carlos Ghosn formally charged on first arrest, then re-arrested for second time

December 21, 2018

Carlos Ghosn re-arrested for third time

ENFRPTJPINFO@FREEGHOSN.COM

Statement of Carlos Ghosn

January 7, 2019

Your Honor, 

I am grateful to finally have the opportunity to speak publicly. I look forward to beginning the process of defending myself against the accusations that have been made against me. 

First, let me say that I have a genuine love and appreciation for Nissan. I believe strongly that in all of my efforts on behalf of the company, I have acted honorably, legally, and with the knowledge and approval of the appropriate executives inside the company—with the sole purpose of supporting and strengthening Nissan, and helping to restore its place as one of Japan’s finest and most respected companies. 

Now I would like to address the allegations. 

1. The FX Forward contracts 

When I first joined Nissan and moved to Japan almost 20 years ago, I wanted to be paid in U.S. dollars, but was told that that was not possible and was given an employment contract that required me to be paid in Japanese yen. I have long been concerned about the volatility of the yen relative to the U.S. dollar. I am a U.S. dollar-based individual—my children live in the U.S. and I have strong ties to Lebanon, whose currency has a fixed exchange rate against the U.S. dollar. I wanted predictability in my income in order to help me take care of my family. 

To deal with this issue, I entered into foreign exchange contracts throughout my tenure at Nissan, beginning in 2002. Two such contracts are at issue in this proceeding. One was signed in 2006, when the Nissan stock price was around 1500 yen and the yen/dollar rate was around 118. The other was signed in 2007, when the Nissan stock price was around 1400 yen and the yen/dollar exchange rate was around 114. 

The 2008–2009 financial crisis caused Nissan’s shares to plummet to 400 yen in October 2008 and to 250 yen in February 2009 (down more than 80% from its peak) and the yen/dollar exchange rate dropped below 80. It was a perfect storm that no one predicted. The entire banking system was frozen, and the bank asked for an immediate increase in my collateral on the contracts, which I could not satisfy on my own. 

I was faced with two stark choices: 

  1. Resign from Nissan, so that I could receive my retirement allowance, which I could then use to provide the necessary collateral. But my moral commitment to Nissan would not allow me to step down during that crucial time; a captain doesn’t jump ship in the middle of a storm. 
  2. Ask Nissan to temporarily take on the collateral, so long as it came to no cost to the company, while I gathered collateral from my other sources. 

I chose option 2. The FX contracts were then transferred back to me without Nissan incurring any loss. 

2. Khaled Juffali 

Khaled Juffali has been a long-time supporter and partner of Nissan. During a very difficult period, Khaled Juffali Company helped Nissan solicit financing and helped Nissan solve a complicated problem involving a local distributor—indeed, Juffali helped Nissan restructure struggling distributors throughout the Gulf region, enabling Nissan to better compete with rivals like Toyota, which was outperforming Nissan. Juffali also assisted Nissan in negotiating the development of a manufacturing plant in Saudi Arabia, organizing high-level meetings with Saudi officials. 

Khaled Juffali Company was appropriately compensated—an amount disclosed to and approved by the appropriate officers at Nissan—in exchange for these critical services that substantially benefited Nissan. 

3. The FIEL Allegations 

Four major companies sought to recruit me while I was CEO of Nissan, including Ford (by Bill Ford) and General Motors (by Steve Rattner, the then-Car Czar under President Barack Obama). Even though their proposals were very attractive, I could not in good conscience abandon Nissan while we were in the midst of our turnaround. Nissan is an iconic Japanese company that I care about deeply. Although I chose not to pursue the other opportunities, I did keep a record of the market compensation for my role, which those companies offered me if I had taken these jobs. This was an internal benchmark that I kept for my own future reference—it had no legal effect; it was never shared with the directors; and it never represented any kind of binding commitment. In fact, the various proposals for non-compete and advisory services post-retirement made by some members of the board did not reflect or reference my internal calculations, underscoring their hypothetical, non-binding nature. 

Contrary to the accusations made by the prosecutors, I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed. Moreover, I understood that any draft proposals for post-retirement compensation were reviewed by internal and external lawyers, showing I had no intent to violate the law. For me, the test is the “death test”: if I died today, could my heirs require Nissan to pay anything other than my retirement allowance? The answer is an unequivocal “No.” 

4. Contribution to Nissan 

I have dedicated two decades of my life to reviving Nissan and building the Alliance. I worked toward these goals day and night, on the earth and in the air, standing shoulder to shoulder with hardworking Nissan employees around the globe, to create value. The fruits of our labors have been extraordinary. We transformed Nissan, moving it from a position of a debt of 2 trillion yen in 1999 to cash of 1.8 trillion yen at the end of 2006, from 2.5 million cars sold in 1999 at a significant loss to 5.8 million cars sold profitably in 2016. Nissan’s asset base tripled during the period. We saw the revival of icons like the Fairlady Z and Nissan G-TR; Nissan’s industrial entry into Wuhon, China, St. Petersburg, Russia, Chennai, India, and Resende, Brazil; the pioneering of a mass market for electric cars with the Leaf; the jumpstarting of autonomous cars; the introduction of Mitsubishi Motors to the Alliance; and the Alliance becoming the number one auto group in the world in 2017, producing more than 10 million cars annually. We created, directly and indirectly, countless jobs in Japan and reestablished Nissan as a pillar of the Japanese economy. 

These accomplishments—secured alongside the peerless team of Nissan employees worldwide—are the greatest joy of my life, next to my family. 

5. Conclusion 

Your Honor, I am an innocent of the accusations made against me. I have always acted with integrity and have never been accused of any wrongdoing in my several-decade professional career. I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations. 

Thank you, your Honor, for listening to me.

“All of this looks to us like a dispute that should have been handled in a boardroom, not a courtroom.”

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“That goes to the heart of the problem with Japan’s justice system: people suffer for asserting their innocence.”

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“Communist China? No, capitalist Japan, where former Nissan Motors CEO Carlos Ghosn is enduring a bizarre inquisition.”

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“The rule of law in Japan perhaps is not what many of us casually assumed it was. It turns out to be a lot more Putinesque.”

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“I was taught that foreigners and gang members have no human rights, that winning is everything.” 

- Hiroshi Ishikawa, a Japanese prosecutor who had been implicated in a case of false confessions

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“If the case is so strong, why not try it in court, rather than in the media, and stop with this medieval practice of browbeating confessions?”

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January 11, 2019

Carlos formally charged on second and third re-arrest

January 22, 2019

Carlos repeatedly denied bail despite agreeing to 'any and all' bail conditions