Nissan, Ghosn and Japan's legal double standards
Bloomberg -- Sep 11
In Japan, is there one standard of justice for Japanese executives and another for non-Japanese executives? The forced resignation on Monday of Nissan Motor Co.’s chief executive officer, Hiroto Saikawa, certainly seems to suggest as much.

When Nissan wanted to get rid of its then-chairman Carlos Ghosn, it conducted an internal investigation that was kept from Ghosn, found some examples of allegedly inflated compensation, sent the evidence to prosecutors — again without its chairman knowing — and patiently waited for a surprise arrest when Ghosn landed in Toyko last November.

Ghosn then spent the next four months in a small jail cell, under dire conditions that were designed to break him and force a confession. “Hostage justice,” Ghosn criminal defense lawyer Takashi Takano calls it.

Although Ghosn was released on bail in March, he remains essentially under house arrest. One of the conditions of his bail is that he is not allowed to communicate with his wife, Carole. “Ridiculous and inhumane,” fumed Takano in a conversation I had with him a few weeks ago. (In a statement issued Monday afternoon, Takano described Nissan’s allegations as “baseless,” and described the company’s actions against him as “their orchestrated coup.”)

Now consider Saikawa’s situation.

A fierce opponent of Ghosn’s plan to merge Nissan with its smaller alliance partner, Renault SA, Saikawa took charge once Ghosn landed in prison. He was, by most accounts, a terrible CEO, unable to heal the rift with Renault, while his tenure, as Bloomberg News put it, was “marked by a series of missteps.” (He skipped a news conference in which he was supposed to talk about the company’s falsification of emissions data, for instance.) He also failed to stem a steep profit decline: Earnings were down 94 percent in the quarter that ended in June. Over the last year, Nissan’s stock price has dropped nearly in half.

Last week, the results of an internal investigation revealed that Saikawa had received compensation that was … well, whaddya know? … inflated. According to Bloomberg News, he was overpaid by $841,000 via stock appreciation rights. Three other executives were also overpaid — including, irony of ironies, Hari Nada, the former head of Nissan’s CEO office, who was the first to raise questions about Ghosn’s compensation.

In response to all of that, did a whistle-blower inside Nissan launch a secret investigation? Did anyone turn over evidence to prosecutors? Were Saikawa and the others arrested, tossed in jail and interrogated endlessly? You know the answer to that: Of course not.

Instead, the Nissan board unanimously voted to demand Saikawa’s resignation. That’s no doubt humiliating. But it’s not even remotely on par with what happened — and is still happening — to Ghosn.

News source: Bloomberg
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