Find below the latest updates on pending legal cases that involve Carlos Ghosn.
Update on proceedings in Japan
3 separate proceedings involving 4 charges are now pending against Carlos Ghosn in Japan:
- Two distinct periods of underreporting income to the Japanese financial authorities;
- Aggravated breach of trust for Nissan’s alleged coverage of losses on personal investments and the alleged misappropriation of funds via Saudi Arabia for personal purposes;
- Aggravated breach of trust for alleged misappropriation of funds via Oman for personal purposes.
So what are the allegations that led to Carlos Ghosn’s several spectacular arrests, followed by a long period of detention? At the time of his first arrest, only one allegation was made against Mr Ghosn. The other prosecutions and investigations came later to substantiate a presumption of guilt after the event that had already been made from the outset, the grounds for which had to be sought thereafter at all costs.
1/ The alleged underreporting of income to the Japanese financial authorities
These are two separate charges, for the same reason, but for different periods of time, with the sole purpose of prolonging the detention of Carlos Ghosn.
According to the Japanese prosecutors, Carlos Ghosn allegedly failed to declare 9.1 billion yens (approximately €73 million) as future revenues over the period 2011-2015 and 2016-2018.
However, the income in question was not received and can in no way give rise to any suspicion of tax evasion or violation of financial market law with regard to the obligation to declare potential income taxes. The income concerned by this procedure concerns only hypothetical income linked to pension rights in return for the acceptance of a non-competition clause, an issue about which Mr Ghosn had not yet taken a decision.
The unjustified nature of this allegation is obvious. In any event, there is no need to place and keep a person in detention for months in order to investigate this situation, which is well-known to the Japanese public prosecutor’s office, since it had already been discussed with the authorities ten years earlier.
2/ The charge of aggravated breach of trust for Nissan’s alleged coverage of losses on personal investments and the alleged misappropriation of funds via Saudi Arabia for personal purposes
The Japanese public prosecutor suspects Carlos Ghosn of having Nissan’s allegedly covered losses on personal investments and misappropriated for his own benefit part of the performance bonuses paid to two Renault-Nissan dealers: Khaled Al-Juffali in Saudi Arabia (for €13 million paid between 2009 and 2012).
In reality, these payments were perfectly legitimate and the allegations are based on mere intellectual constructs.
Khaled Juffali has been a long-standing partner of Nissan in the region, particularly in the face of competition from Toyota. As well as supporting global companies such as IBM, Siemens and Mercedes-Benz in developing their activities in Saudi Arabia, Mr Juffali had created an equal joint venture with Nissan. This joint venture, named Nissan Gulf FZCO, promotes Nissan’s commercial activities in the Middle-East (Kuwait, Abu Dhabi, Bahrain and Saudi Arabia) from October 2008, right after the world economic crisis of September 2008.
As of February 2009, the promotion of Nissan’s activities in Saudi Arabia was transferred from Nissan Gulf to Khaled Juffali company, whose valuable intermediary helped to multiply sales and replace Nissan’s former agent with a direct Nissan presence in Saudi Arabia within the framework of a new joint venture in 2013, unequal this time, with Nissan holding 75%, after having obtained a license that was particularly difficult to obtain from the Saudi authorities allowing a foreign group to hold a majority stake in a Saudi company.
All payments made by Nissan to Juffali from 2009 to 2012 were recommended and approved by Nissan’s senior management, at both regional and parent company level, by the sales and finance teams, and by members of the executive committees and senior management.
It makes no sense, in this context, to speak of an unjustified payment to Khaled Juffali, on the one hand to benefit Carlos Ghosn, and on the other hand for the repayment of a guarantee that Mr. Juffali gave to Mr. Ghosn during the financial crisis of 2008 since the guarantee was never called. Without a debt, there is no cause for any repayment. This accusation establishes a purely hypothetical relationship between several unrelated elements. It is pure speculation that has not been supported by any evidence. Again, there is no need for a long and cruel exclusion of Carlos Ghosn in order to make the necessary verifications.
3/ The charge of aggravated breach of trust for alleged misappropriation of funds via Oman for personal purposes
The incentive bonuses paid were intended to reward the world’s most successful intermediaries, a both common and legal practice. Suhail Bahwan Automobile (SBA) was one of the world’s most successful dealerships, generating $6.5 billion in sales for Nissan between 2011 and 2018 (average of $850 million per year).
Bonuses paid to intermediaries are the responsibility of the regional managers and the amounts are approved by Nissan’s chain of command. It should be noted that as of 2017, Mr Ghosn is no longer Nissan’s Chief Executive Officer, having vacated this seat in favour of Mr Saikawa which maintained the incentive bonus plan for top-performing intermediaries, including SBA. Moreover, in view of SBA’s performance, the bonuses paid were lower than those received by European or American brokers for a similar performance.
Update on investigations in France
Following the audit carried out by Mazars, a firm commissioned by Renault and Nissan to explore the accounts of their joint subsidiary RNBV, several reports were made to the courts, triggering a preliminary investigation by the Nanterre public prosecutor’s office. It is important to remember that Carlos Ghosn is not being prosecuted in France.
1/ Renault-Nissan Alliance anniversary celebration in Versailles
Contrary to what has been stated by people who did not attend, this was a corporate event and not a private party.
The evening of 9 March 2014 was by formal invitation from the two companies, Renault and Nissan. The standing of the official guests, including Renault director Cherie Blair, the son of Nissan’s founder, and the speech given on the Alliance, leave little doubt that the celebration was entirely professional. It so happens that the date was also Mr Ghosn’s birthday, but Mr Ghosn’s real private birthday party actually took place the following day, 10 March 2014, in a Parisian restaurant to which people from Mr Ghosn’s limited circle of family and friends were personally invited. This private event was of course paid for by Carlos Ghosn.
2/ The complimentary use of the Château de Versailles for Mr Ghosn’s wedding ceremony
Carlos Ghosn never asked for the complimentary use of the premises for this private event. The event was paid for entirely from private funds on the basis of an invoice including all the services (catering, music, flowers etc…) presented by the company in charge of the organization of the event on which it is indicated that the reception room is “complimentary”.
Carlos Ghosn discovered in the press, more than 2 years after the date of the event, that this gracious provision would in fact have been imputed to Renault, probably due to a misinterpretation by the organizers; it did not cost anything to Renault, nor to the Domaine du Château de Versailles and, as soon as they became aware of this erroneous imputation, the Ghosn couple offered to regularize a situation that they in no way created.
3/ The alleged irregularities revealed by the audit commissioned by RNBV
On 4 June 2019, Renault announced that it had identified that Carlos Ghosn had incurred €11 million in “suspicious expenditure” since 2012. The sum referred to covered “additional costs of Mr Ghosn’s travel by plane”, “certain expenses incurred by Carlos Ghosn” as well as “donations to non-profit organizations”, according to the Renault press release. It goes without saying that Mr Ghosn would like to respond point by point to these accusations and refute them.
For several months now, elements of this “audit” have been circulating in the media without Mr Ghosn or his lawyers, who discovered its existence through the press, having ever received it.