Tokyo prosecutors have charged former Nissan Motor Chairman Carlos Ghosn with aggravated breach of trust for allegedly transferring 1.8 billion yen ($16.59 million) in private investment losses to the automaker.
Ghosn is also suspected of using Nissan's money to pay more than 1.2 billion yen to a company owned by a Saudi Arabian acquaintance. He was initially indicted, together with former Nissan Representative Director Greg Kelly, for understating his pay in the company’s securities reports. He was later indicted again on the same charge, with prosecutors alleging that Ghosn underreported his pay by a total of 9.1 billion yen over an 8-year period.
If the allegations are true, the globally renowned business leader abused his power at Nissan for personal gain.
Ghosn has denied all allegations and said he caused no losses at Nissan. Legal experts are split over whether Ghosn has broken the law, so it is up to the judiciary to determine his guilt or innocence.
The Ghosn case has drawn significant global attention and sparked criticism of Japan's judicial system due to the former executive's protracted detention. As such, if Ghosn is to be proven guilty, prosecutors must make their case carefully and in a way that convinces even the casual observer.
To address international questions about Japan's criminal justice system, prosecutors need to unpack the entire story -- all the background details of the case -- as much as possible, including a clear account of the plea-bargain deal that opened the case.
Not all of the criticism comes from abroad. Japan's "hostage justice" system, in which criminal suspects are not granted bail as long as they claim their innocence, has been attacked at home as well. There was a chance to make reforms when Japan decided to introduce elements of a plea-bargain system, but the Legislative Council, an advisory panel to the justice minister, did not introduce significant change.
Even without the Ghosn case, this is an issue that needs to be addressed by the Supreme Court, the Justice Ministry and the Public Prosecutors Office.
Nissan itself was also indicted for allegedly misstating Ghosn's pay. The company's current management team is critical of the former chairman, saying he abused his power for personal gain. If what they say is true, then the company's top brass bears a lot of responsibility for overlooking his misconduct.
Nissan must waste no time in establishing corporate governance and internal controls, as well as be ever-mindful of its duty to be transparent about the Ghosn case and the actions of its management.