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Money News

Carlos Ghosn Escapes to Lebanon

January 07, 2020

2 min read

Carlos Ghosn, the former CEO and chairman of carmakers Renault and Nissan and chairman of Mitsubishi, escaped from house arrest in Japan, and fled to Lebanon, smuggled away in an electronics box, on December 30, 2019.

Before his initial arrest in November 2018, Ghosn was known for revitalizing the Japanese automobile company Nissan and for overseeing an alliance between three of the world’s biggest car companies: Renault, Nissan, and Mitsubishi. Ghosn was first arrested for allegedly under-reporting his Nissan income by approximately $43 million, and other reported financial misconduct. He had been under house arrest since April 2019.

Ghosn’s Career

Originally from Brazil, Ghosn started his career in the car business at the French auto tire manufacturer Michelin, where he worked for 18 years and eventually ran the company’s North American business. He then spent three years as a vice president at the French company Renault.

In 1999, Renault purchased 36.8% of Nissan, creating a partnership called the Renault-Nissan alliance. Ghosn moved to Tokyo to lead Nissan and bail it out of $35 billion of debt. By cutting 14% of Nissan’s employees and cutting costs, Ghosh reportedly turned around Nissan’s business.

Ghosn became the Chairman CEO of both Renault and Nissan by 2008. He was the first person to be the CEO of two Fortune 500 countries simultaneously. Additionally, he was an executive in Japan, where non-Japanese CEOs are unusual. Nissan acquired 34% of Mitsubishi in 2016, further expanding the Renault-Nissan partnership. Ghosn took on another title as the Chairman of Mitsubishi.

Ghosn’s Arrest

In 2017, Ghosn earned $18.2 million annually, and was the second-highest-paid auto executive globally, according to Bloomberg. After stepping down from his CEO role in 2017, Nissan alleged that Ghosn had underreported his income from 2009 to 2017 with the help of an aide. Both Ghosn and the aide were arrested in Tokyo in 2018.

Nissan also alleges that Ghosn funneled $5 million of company money to a third party company in Oman to enrich himself. Renault also claims that Ghosn had been sending money to the same company in Oman, and that he had used company money to pay for his 2016 wedding.

Ghosn was under house arrest awaiting trial with 24/7 surveillance when he escaped Japan by fitting himself into a case used to carry audio equipment. Accompanied by two men, Ghosn flew to Turkey and then to Beirut, Lebanon, where he reportedly hopes to clear his name. Meanwhile, international police organization Interpol issued a Red Notice to Lebanon, urging the country to locate and arrest Ghosn.

Do Your Research

Carlos Ghosn is far from the first executive to possibly face—and to try to avoid—consequences for alleged corporate malfeasance.

While uncertainty is part of investing, it’s important to try to arm yourself with as much information as possible when deciding whether or not to invest in a company.  Remember to research company leadership and culture when you’re considering purchasing company stock.

Cheers to 2020!

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By Claire Grant
Claire is a content writer for Stash.

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