Happy New Year’s Eve. A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
Former Nissan and Renault chief Carlos Ghosn has fled Japan, where he was awaiting trial on alleged financial crimes. His destination: Lebanon.
Here’s what we know:
- As a condition of his bail, Ghosn was required to stay in Japan.
- Ghosn’s lawyers in Japan hold his passports. He’s a citizen of Lebanon, France and Brazil.
- Ghosn has released a statement decrying “a rigged Japanese justice system.”
- The statement confirmed that Ghosn is in Lebanon.
Beyond that, there are more questions that answers. It’s not clear how Ghosn was able to leave Japan, or whether he intends to return to stand trial. At the moment, it appears one of the world’s most successful auto executives has become a high-profile fugitive.
The initial focus is likely to be on the details of Ghosn’s flight from justice. According to the Wall Street Journal, a person familiar with the matter said he arrived in Lebanon via Turkey.
Remember: Ghosn faces a litany of criminal charges in Japan including allegations that he understated his income for years and funneled $5 million to a car dealership he controlled.
Ghosn has maintained his innocence. He said in his statement:
“I am now in Lebanon and will no longer be held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant, and basic human rights are denied, in flagrant disregard of Japan’s legal obligations under international law and treaties it is bound to uphold.”
There may also be business implications.
The context: Ghosn started his career at Michelin before rising through the ranks at Renault (RNLSY). He orchestrated a major restructuring of the struggling French carmaker, returning it to profitability and earning himself the nickname “Le cost killer.”
He joined Nissan (NSANF) in 1999 when it formed an alliance with Renault, but he kept his responsibilities at the French carmaker as part of an unusual arrangement. Ghosn is also credited with executing a stunning turnaround at Nissan (NSANF).
The two carmakers work together with Mitsubishi Motors in an unusual and powerful alliance that employs roughly 470,000 people, operates some 120 plants and makes about one of every nine cars sold worldwide.
The boss: Ghosn was the glue that held the alliance together. Since his arrest in Japan in November 2018, sales at Nissan and Renault have suffered, and disagreements have surfaced over the future direction of the alliance.
It’s possible that Ghosn’s departure from Japan will benefit the alliance. A lengthy trial in Japan would be an unwelcome distraction at a time when global automakers face a global sales downturn and need to focus on developing and selling electric cars.
But does Ghosn now plan to make a quiet life in Lebanon? That seems unlikely.
Huawei has released an estimate showing that its sales will top 850 billion Chinese yuan ($122 billion) in 2019, an 18% increase over the previous year.
The company says that growth failed to meet initial expectations. But the results also show that the Chinese company is still growing at a decent clip in spite of an intense US campaign aimed at undermining its global business.
The United States has accused Huawei of spying for Beijing (the company denies this). Washington also placed the company on a trade blacklist in May, barring American companies from selling the company software and components without a license.
Another front: The Trump administration has also pressured its allies to not use Huawei telecommunications equipment in their super-fast 5G networks.
Huawei is a private company, and it didn’t publish earnings figures. But the sales numbers suggest the company is in better shape than some thought.
Here’s what Eric Xu, Huawei’s rotating chairman, said in his New Year’s message:
“These figures are lower than our initial projections, yet business remains solid and we stand strong in the face of adversity.”
And what about 2020? “It’s going to be a difficult year for us,” said Xu.
The S&P Case-Shiller Home Price Index is out at 9:00 a.m. ET.
Also today: US consumer confidence numbers for December will be published at 10:00 a.m. ET
Coming tonight: Enjoy your New Year’s Eve. US markets are closed on Wednesday.