The Lament Of Carlos Ghosn: The Man Who Loved Nissan Has His Day In Court


The former Chairman of Nissan, Carlos Ghosn, made his first public appearance since his arrest in November of 2018, today in Japanese court. He discussed his innocence of any crime,  his love for the company that betrayed him, and disputed the charges he is facing in court. The statement was read in English. We will post the Japanese later. 

January 8, 2019

Statement of Carlos Ghosn

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, enablingNissan 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 ourturnaround. 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 offeredme 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. Infact, 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.


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.

Exclusive: Former Prosecutor Says, “If Ghosn is rearrested, NISSAN CEO should be arrested as well”

Nobuo Gohara (郷原信郎元検事)

Note: We met with former prosecutor Nobuo Gohara, last week, to discuss the arrest and prosecution of Carlos Ghosn. Mr. Ghosn has been accused of financial crimes, and has now been detained 23 days and rearrested. With Gohara’s permission, we are publishing his translated observatiosn about the case, written prior to the re-arrest of Mr. Ghosn today (December 10th 2018). *Portions of this were previously published in Japanese on Yahoo! News. 

The Arrest of President & CEO Saikawa is Inevitable if  Mr. Ghosn is Re-arrested based on Fake Statement made in the Last 3 Years

The End of The Myth of The Special Prosecutors is one book that Mr. Gohara has written on Japan’s prosecutors going off the rails.

Today (December 10) was the last day of the extended detention of Mr. Carlos Ghosn, who was arrested by the Special Investigation Unit of the Tokyo District Court on November 19 and was removed from the Representative Directorship of Nissan 3 days thereafter at the extraordinary board meeting, as well as Mr. Greg Kelly.

The suspected offense of his violation of the Financial Instruments and Exchange Act turned out to be the fact that he did not describe the “agreement on payment of compensation after his retirement” in the securities report.  However, given that the payment had not been determined and that it cannot be considered as a fake statement of an “important matter”, there are serious concerns about considering this non-description a crime.

The End of The Myth of The Special Prosecutors is one book that Mr. Gohara has written on Japan’s prosecutors going off the rails.

There has been an increasing skepticism about the method of prosecutors’ investigation who suddenly arrested Mr. Ghosn at Haneda Airport inside his personal aircraft when he just returned to Japan.  As I have pointed out in my article (“Ghosn Can Only Be Indicted if Prosecutors Follow Their Organizational Logic”), since the prosecutors have arrested him based on their unique decision, it is impossible for them “not to indict Mr. Ghosn”, as it would be self-denying and contrary to the “logic of the organization”.  It had thus been fully anticipated that the prosecutors would indict Mr. Ghosn today.

However, the facts that have newly been revealed through the subsequent media reports are raising even more serious concerns with respect to his arrest based on the “agreement on payment of compensation after his retirement” (although various media organizations report that those facts constitute the ground of his indictment by the prosecutors).

Could this herald the possible “collapse” of the prosecutor’s case

There is Virtually No More Possibility that Mr. Ghosn will be Re-arrested with the Crime of Aggravated Breach of Trust or the like

First of all, it has been reported that the prosecutors intend to re-arrest Mr. Ghosn on the ground that he has “underdescribed his executive compensation of 4 billion yen for the last 3 years”.  The facts that constituted the ground of his arrest and detention to date had been the fake statement around the “agreement on payment of compensation after his retirement” for the period of 5 years up to March 2015 term.  The prosecutors, however, are intending to re-arrest him based on the same fake statement but for the last 3 years up to March 2018 term.

“When The Thinking Processes Of The Organization Stop” discusses the implications of an infamous case in which a prosecutor forged evidence and dysfunctional organizations in general

There had been a speculation that the fake statement in the securities report was merely a ”starting point” and that the Special Investigation Unit was contemplating to pursue some “substantive crime” such as aggravated breach of trust.  However, had they been able to pursue the crime of aggravated breach of trust, they would have re-arrested him based on that.  Given the overloaded investigation lineup of the Public Prosecutors Office, which has been accepting prosecutors dispatched from the District Public Prosecutor Offices, as the year end approaches when they need to send the dispatched prosecutors back to where they belong, they would want to avoid arresting him based on the new facts on and after December 10 unless extreme circumstances arise, because the period of detention of 20 days would then extend to the year end.  This means that the only “charge” based on which the prosecutors intend to indict Mr. Ghosn is the fake statement of his executive compensation.  On the basis that they will re-arrest him based on the same fake statement as the facts constituting his initial arrest and detention, it is highly probable that the investigation will end there.

This is a scenario which I have predicted, as I have repeatedly stated since right after the arrest.  That is, based on the facts that have been reported, it is unlikely that Mr. Ghosn will be indicted for the aggravated breach of trust (“Ghosn Case: Yomiuri Beginning to Ditch Prosecutors while Asahi Cling to Them”).  However, for those who firmly believe that the “justice always lies with prosecutors” and because of that believe “Mr. Ghosn, who was arrested by the prosecutors, is a villain”, it would be hard to accept that the investigation would end by only charging him with such a trivial crime as fake statement and not criminally pursuing any “substantive crime”.

Serious Issues Concerning Procedures of Detention

Of further significance is a “serious issue concerning the legality of detention” in relation to the re-arresting of Mr. Ghosn and Mr. Kelly based on the “underdescription of Mr. Ghosn’s executive compensation of 4 billion yen for the last 3 years”.

A securities report is something which is prepared and submitted each business year.  As such, there is supposed to be “one independent crime” for each business year, totaling to 8 crimes, if there are fake statements in all securities reports for the period of 8 years from March 2010 term to March 2018 term.  However, the charge against Mr. Ghosn with respect to the “agreement on payment of compensation after his retirement” is different from a standard fake statement in the securities report.

An “MoU” was said to have been made between Mr. Ghosn and the Head of Secretary Office every year with respect to part of the executive compensation payable after his retirement under the pretense of some other payment, which had been kept secret to the Departments of General Affairs and Finance of Nissan and had been kept confidentially.  The securities report for each year had been prepared and submitted without regard to the agreement made in such “MoU”.  Since the acts of preparation of the “MoU” for 8 years had been repeated every year under the same intent and purpose, they constitute “one inclusive crime” provided that they do constitute a crime.  They should effectively be interpreted as “one crime” as a whole.  “Dividing” these acts into those conducted during the first 5 years and those during the last 3 years for the purpose of repeating the arrest and detention means arresting and detaining based on the same facts, which is a significant issue in terms of due process of detention.

On top of that, if the prosecutors intend to re-arrest them based on the acts in the last 3 years after completing their investigation and processing of the fake statement for the first 5 years, it would be that they had “reserved” the acts of the last 3 years for the re-arrest.  This is an unjustifiable detention which deviates the common sense of prosecutors.  Inevitably, Mr. Ghosn and Mr. Kelly would file a quasi-complaint with respect to the detention or a special appeal with the Supreme Court, claiming that it is an unjustifiable detention in violation of due process under Article 31 of the Constitution.

It Would Be Difficult to Deny Criminal Liability of President Saikawa

“When The Thinking Processes Of The Organization Stop” discusses the implications of an infamous case in which a prosecutor forged evidence and dysfunctional organizations in general, which could apply to Nissan at present.

A more significant issue is that it has been reported by Asahi, Nikkei, and NHK that Hiroto Saikawa, President and CEO of Nissan, has also signed the “document agreeing on the post-retirement compensation”. It has been reported that Mr. Saikawa has signed a document titled “Employment Agreement”, which describes the amount of compensation for the agreement prohibiting Mr. Ghosn to enter into any consulting agreement or to assume office as an officer with any competing companies after his retirement.  It has also been reported that, apart from the above, a document was prepared which specified the amount of compensation which should have been received by Mr. Ghosn each term and the amount which had actually been paid, as well as the balance thereof, and that it was signed by Mr. Ghosn the ex-Chairman and the executive employees as his close aides.

The prosecutors and media may be denying the criminal liability of Mr. Saikawa  for his fake statement of the executive compensation based on the reason that, although he had been aware of the payment of compensation as consideration for the prohibition of Mr. Ghosn’s entrance into any consulting agreement or assumption of office with competing companies after his retirement, he had not recognized it as a payment of executive compensation under some other pretext, and because of this, he did not know that it should have been described in the securities report as “executive compensation”.

I wonder, however, how President Saikawa had recognized the consideration for the prohibition concerning the consulting agreement and non-competitive agreement.  If he had signed the document based on his understanding that it was a legitimate and lawful payment, it would mean that the agreement has its basis and that Mr. Ghosn has an obligation to refrain from entering into any consulting agreement and competing in return for the payment.  It would thus be considered a “legitimate contractual consideration” rather than a “deferred payment of executive compensation”.

Above all, why did Mr. Saikawa think it was necessary to enter into an agreement that prohibits Mr. Ghosn from entering into any consulting agreement or competing after his retirement when there was actually no specific sign of his retirement?  We can never understand the reason unless the agreement is explained as an “alternative for reducing the executive compensation by half”.  In the end, we cannot help but think that Mr. Saikawa had almost the same recognition as Mr. Ghosn and others with respect to the agreement.

The offense of the crime of fake statement in the securities report is constituted not by “making a fake statement” but by “submitting” the securities report with a fake statement on an important matter. The person who has an obligation to ensure accurate description and “submission” is the CEO in the case of Nissan, which is Mr. Saikawa from and after March 2017 term.  If, as mentioned above, Mr. Saikawa had largely the same recognition with Mr. Ghosn with respect to the “post-retirement payment of compensation”, we have to say that it is Mr. Saikawa who would primarily be criminally liable for the last 2 years (apart from the severity of the ultimate sentence).  That is, if the prosecutors are to pursue the indictment of the fake statement of the securities report for the last 3 years, it is inevitable to charge Mr. Saikawa as well.

Can Mr. Saikawa Withstand Criticism of being Involved in “Backdoor Agreement” with Prosecutors?

This is when the idea of plea bargain occurs to us—that is, whether or not there is a possibility that Mr. Saikawa has agreed to a plea bargain with the prosecutors by cooperating in the investigation on the “crimes of others” (i.e., of Mr. Ghosn and Mr. Kelly), thereby being exempted from criminal punishment.

It is possible that there is a “backdoor agreement” between the prosecutors and President Saikawa “targeting” Mr. Ghosn and Mr. Kelly.  However, if such agreement exists, where it is agreed not to charge President Saikawa, what was it all about that he criticized Mr. Ghosn at the press conference immediately after his arrest, going so far as to say that he “felt resentment (toward Mr. Ghosn)”?  There is likely to be severe criticisms against such agreement as well as against Mr. Saikawa domestically and internationally.  Furthermore, if this is the case, it is likely that Mr. Saikawa falls under the “party with special interest” in relation to the extraordinary board meeting where he served as the chairman and determined the removal of Mr. Ghosn from his position of the Representative Director and Chairman. This may affect the force and effect of the vote (““Serious Concern” over Plea Bargain between Executives of Nissan and Prosecutors” – Are Directors Involved in Securities Report able to Participate in Voting relating to Removal of Ghosn?).

Given all of the above, if the prosecutors are to re-arrest Mr. Ghosn and Mr. Kelly on the ground of a fake statement in the securities report for the last 3 years, there is no other choice than to arrest Mr. Saikawa and hold him criminally liable.  However, this would virtually mean the collapse of the current management team of Nissan which executed a coup d’etat at the initiative of President Saikawa and upset the Ghosn Regime.  The investigation of the prosecutors, which has been conducted in close cooperation with the management team of Nissan, is also at a risk of “collapsing”.

*Translation was provided by Mr. Gohara’s office, with some minor editing by JSRC staff for clarity based on the original Japanese text.