Now-former Nissan Chairman Carlos Ghosn hasn't been charged by Tokyo prosecutors, but that hasn't stopped them from detaining him in a spartan jail known for its cramped rooms and cold temperatures, according to Reuters. The jet-setting executive who led an alliance between Nissan, Renault and Mitsubishi that produces one out of every nine cars sold in the world was arrested over vague charges of financial improprieties. According to leaks to Japanese media, Ghosn underreported his income to the Tokyo Stock Exchange, and also improperly used company funds for personal expenses.
One report that garnered particularly intense attention in the media claimed that Ghosn, with the help of another Nissan board member who was also arrested by Tokyo authorities, created a slush fund to buy properties, including homes in Beirut and Rio de Janeiro, for his personal use. All told, Ghosn reportedly spent the equivalent of $18 million on the properties out of a Netherlands-based fund that was supposed to finance startups. However, Nissan has no operations in either Lebanon or Brazil.
Bloomberg also reported that despite Ghosn's comparatively low compensation, he and his family had managed to rack up an impressive list of properties, even before the time period when his alleged misdeeds took place. They include an estate in a Paris suburb and a Lebanon winery.
Ghosn's compensation was far below that of his peers.
(Courtesy of Bloomberg)
The Ghosns also bought speculative properties in New York City through an LLC. Over the past ten years, Ghosn bought two units in a glass-fronted condominium building in Manhattan’s West Village where two of his daughters once lived as one-time residents. Ghosn recently sold the units for about $6 million.
Media reports also claimed that Nissan paid "huge sums" toward Ghosn’s residences in four cities around the world that weren’t justified by the business, while Ghosn also reportedly charged travel expenses for family vacations that amounted to tens of millions of yen.
Now, Ghosn, who is accustomed to a life of jet-setting luxury, is living in a cell at the Tokyo Detention Center, according to Reuters. He is most likely living in a 52-square-foot cell with no heat, in a prison where he can only shower on set days, according to defense attorneys who have been inside the prison. The food at the prison tends to be Bento-type meals with little variety. Visits by family and friends are limited to 15 minutes, once per day. This, for a man who held his wedding party at the Palace of Versailles.
the difficult conditions are intended to make life hard for people like Ghosn.
As one professor who spoke with Reuters put it, the prison doesn't need to be comfortable (though, compared with prisons in the US, it appears to be downright luxurious).
"It doesn’t need to be comfortable because it’s not a hotel," said Yasuyuki Deguchi, a professor at Tokyo Future University. "But it’s neat, hygienic and tidy."
White collar criminals in particular tend to have a hard time at the prison. But that's by design.
The experience is particularly hard "for elites caught up in financial crimes," he added. "They can’t stand it and it makes them want to confess."
At this point, Ghosn could be stuck in the detention facility for another three weeks as prosecutors prepare charges against him. Japanese law allows detainees to be held for up to 23 days without being formally charged. In the mean time, Ghosn won't have access to any electronic communications. He also won't have access to ties, belts or socks - they are banned from the prison to stop inmates from attempting suicide. And even once he gets out, it's very likely that the life of the archetypal "Davos Man" will never be the same.