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This article assignment relates to an interesting story regarding Carlos Ghosn who previously masterminded the successful turnarounds of both Nissan and Peugeot and then became the CEO of both companies as well as helping Mitsubishi. Mr. Ghosn was known as a workaholic CEO and would fly back and forth (6,000 miles one way) each week between Tokyo and Paris where the companies are headquartered. He was considered a pioneer CEO with great vision and commanded a large compensation package. Then, in November 2018, Mr. Ghosn and a Nissan executive, Greg Kelly, were suddenly arrested after landing in Tokyo on charges of Mr. Ghosn understating his tax obligations. One of the primary tax issues in this case related to deferred compensation (Chapter 13 material) and it’s disclosure. Mr. Ghosn and his aide, Greg Kelly, claim that they did nothing wrong. Mr. Ghosn believed that he would not be able to provide an adequate defense for his position and there was much publicity to support him regarding the alleged unfairness of the Japanese prosecution system regarding Mr. Ghosn’s treatment as compared to US prosecutions. (Over 99% of cases that go to trial in Japan result in a conviction, usually based on a confession.) We don’t see anything like that conviction rate in the US trial system.
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