/Opinion | The real reason Carlos Ghosn’s great escape is a big embarrassment for Japan

Opinion | The real reason Carlos Ghosn’s great escape is a big embarrassment for Japan

Former Nissan Motor chariman Carlos Ghosn, right, in Tokyo on April 25, 2019. (Issei Kato/Reuters)

William Pesek is a Tokyo-based writer and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

The news that former Nissan Motor chairman Carlos Ghosn has arrived in Lebanon after fleeing house arrest in Tokyo jolted the international business community and the Japanese public. Ghosn’s great escape has left the Japanese authorities befuddled. They have been forced to admit that they have no record of his departure from a country that’s as obsessed with rules and borders as you’ll find.

The Internet has its theories. Really, how did a 65-year-old gaijin in a deeply homogeneous place beat almost round-the-clock manned and video surveillance, obsessive restrictions on his movements and Japanese customs safeguards?

Did he hide himself in a large musical instrument box, as some reports suggest? Media outlets in Tokyo, Beirut and Paris are serving up tales of exfiltration teams assembled either by Ghosn’s wife, his brothers or Turkish operatives who smuggled him out in private jets. Hollywood is no doubt scrambling to obtain the rights to Ghosn’s adventure. Tom Hanks to star, perhaps?

It will be hard to do justice to Ghosn’s improbable rise and fall. Upon his arrival in Tokyo in 1999, he staged a spectacular turnaround of then-moribund Nissan, later forging an industry-transforming alliance with French carmaker Renault. He was feted and celebrated — but also deeply resented by a corporate establishment that had never seen a foreigner rise so high.

Then came the downfall. On Nov. 19, 2018, he was suddenly arrested at Tokyo’s Haneda Airport for alleged financial misconduct.

Yet Ghosn’s real trick may be the way he exposed the gaping holes in Prime Minister Shinzo Abe’s seven-year effort to restore Japan’s standing in global economic circles.

In his Tuesday announcement from Beirut, Ghosn proved himself rather skilled in the cyber-trolling department. His claims of fleeing “injustice and political persecution” were worded in ways more typically aimed at Pyongyang than a Group of Seven member. The drama, though, demonstrates how two of Abe’s three biggest priorities since 2012 are veering off the road.

Abe took power promising sweeping economic upgrades, steps to make Japan more welcoming to foreign talent and revisions to the nation’s pacifist postwar constitution.

Ghosn’s saga doesn’t say much about this last priority, but it makes a mockery of the first two.

Strengthened corporate governance was touted as a major victory for Abe’s structural reform drive. In recent years, his government rolled out a United Kingdom-like stewardship code to improve management standards, took steps to give shareholders a greater voice in decisions and encouraged more outside directors. It even prodded Japan Inc. to disclose cross-shareholding relationships, a practice long used to avoid foreign takeover attempts.

Yet accounting scandals at Olympus and Toshiba — along with safety-data fudging at Kobe Steel, Mitsubishi Materials, airbag manufacturer Takata and even KYB, maker of earthquake shock absorbers for buildings — show that Japan Inc. still answers to no one. The same goes for Ghosn’s downfall at Nissan.

The point here isn’t to defend Ghosn against the multiple charges of financial misconduct leveled against him. Clearly, the man put too much stock in his own press — and the heroism depicted in the “True Life of Carlos Ghosn” manga series — and fancied himself a corporate king.

Just as it takes a village to raise a child, it requires a dysfunctional system to produce and enable Ghosn’s overreach. Business insiders long surmised Ghosn’s real crime was mulling a formal merger with Renault. Perhaps. Odd, however, that when the man who helped engineer Ghosn’s ouster, Hiroto Saikawa, was also axed for a controversy over his pay, he wasn’t hauled off to jail.

Though many will say that the export sector was the biggest loser of 2019, Japan’s legal system was the biggest casualty. Ghosn’s claims that he faced a “rigged” judicial system are hard to refute. Japan, after all, has a 99 percent conviction rate. Businesspeople around the world wondered how a highly developed nation could hold a celebrity tycoon for months at a time with scant access to lawyers or family.

Allegations of a double standard — one for Japanese executives, another for non-Japanese — are equally hard to refute. And they belie Abe’s stated goal of morphing Japan into a major financial center hospitable to multinational CEOs. Or for chieftains who might have entertained offers to serve on Japanese boards.

Given the recent turmoil in Hong Kong, one might expect banks, trading companies and consultancies headquartered to be giving Tokyo, Osaka or Fukuoka a fresh look. Yet Japan isn’t getting the attention Abe might have hoped. Nor have there been many splashy corporate bids for Japan Inc. names from overseas.

Blame Tokyo’s notorious bureaucracy, rigid labor laws and high taxes. Blame strict immigration standards and an aversion to allowing English to infiltrate the political and corporate establishment. But also blame an economic system that isn’t as ready for global prime time as Abe’s boosters like to argue.

Ghosn arrived in Japan in 1999 keen on shaking up one corner of Japan Inc., and often to spectacular effect. His downfall and escape 20 years later make an apt bookend, showing that for all the talk of a “new” Japan, all too much of the old remains.

Read more:

Carole Ghosn: My husband, Carlos Ghosn, is a victim of Japan’s ‘hostage justice’ system

Jeff Kingston: Brand Japan is taking a hit

Francisco Toro: Japan is a Trumpian paradise of low immigration rates. It’s also a dying country.

Robert J. Samuelson: If you want a peek at the future, try looking at Japan. You may not like what you see.

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