Whatever Carlos Ghosn’s misdeeds, Japan’s openness is also on trial

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AFTER 108 DAYS in detention, Carlos Ghosn, the former chairman of Nissan, was this week granted bail by a Tokyo court while he awaits trial on charges of financial misconduct. In Japan Mr Ghosn was once a business megastar for having rescued the giant carmaker from bankruptcy in the late 1990s. He was the hero in a manga series. When polled, many Japanese even thought the French-Lebanese-Brazilian should be running the country. 

Mr Ghosn’s world changed on November 19th when prosecutors, television cameras in tow, met his private jet on arrival in Tokyo. Prosecutors accuse him of understating his income and allege he improperly offloaded personal foreign-exchange losses via a Nissan subsidiary. He disappeared into an unheated cell, to be interrogated without lawyers and receive only fleeting visits from family. To secure convictions, Japan’s system of justice depends heavily on confessions procured during long, isolating detentions. But Mr Ghosn has refused to confess. He says he has done nothing that Nissan did not approve.

Critics claim that, as a foreigner, Mr Ghosn has been singled out for treatment akin to a Stalinist show trial—right down to character assassination by a rabid press corps. That is not true. Mr Ghosn’s long pre-trial detention is far from unique. After his refusal to confess, Nobumasa Yokoo was detained for 966 days on charges of helping Olympus, a manufacturer of optical equipment, cook its books. The international fuss around Mr Ghosn may even have made the courts more lenient. It is extremely rare to get bail without confessing. Even then, Mr Ghosn had to post ¥1bn ($9m) and submit to surveillance cameras at his home.

Despite Japan’s “hostage-based” justice, in which innocents have been convicted on the basis of confessions obtained by relentless interrogation, other aspects of its justice system are admirable. Overall, it throws far fewer people in prison than most developed countries: 41 out of every 100,000 people, compared with 139 in Britain and 655 in America. First-time offenders often get another chance. Recidivism is low. 

Yet Mr Ghosn’s nationality is far from irrelevant. Stephen Givens, an American lawyer practising in Japan, says the timing of the arrest is “not coincidental”. Mr Ghosn was also boss of Renault, which bailed out Nissan 20 years ago in return for a 43.4% stake. Nissan’s Japanese executives have resented its subsequent transformation into Renault’s cash cow. Nissan had maintained its formal independence in an alliance that also includes Mitsubishi, a smaller Japanese carmaker. Yet the bridling executives surmised Mr Ghosn was working towards a merger of Renault and Nissan. To many in the Japanese establishment, a foreign car company (in which the French state has a stake) owning one of Japan’s most prominent manufacturers is beyond the pale. This week the Financial Times disclosed that Nissan executives persuaded the government of Shinzo Abe to lobby its French counterpart against a merger.

All this has a bearing because, extraordinarily, it is Nissan executives who are supplying prosecutors with much of the evidence on which they are basing their case. Nissan is also spinning the press against its former boss. Yet it beggars belief that other executives were not aware of Mr Ghosn’s remuneration schemes. And if they were not, what does it say about them, and the company’s oversight?

Such questions are scarcely aired in the mainstream Japanese media. And for now, the odds favour the prosecutors, with an average 99.9% conviction rate. Whatever his alleged crimes, tales of Mr Ghosn’s sense of entitlement are losing him supporters. A Marie Antoinette-themed wedding reception in Versailles, underwritten in part with Renault money, betrays a want of self-reflection. President Emmanuel Macron of France, confronted with gilets jaunes at home, has not been eager to spring to Mr Ghosn’s defence. 

Yet Mr Ghosn and his combative new team of lawyers promise to fight. That puts not only the prosecutors on trial—an acquittal would be disastrous for their reputation. Mr Abe and corporate Japan also risk embarrassment. The prime minister often talks about making Japan more open to foreigners and foreign investment. Yet of various high-profile gaijin brought in to run Japanese companies over the past 30 years, only Mr Ghosn had made an indisputable success of things—until now. Japanese business is clearly not as open to the world as Mr Abe says it is.

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