Nissan wins as court orders Carlos Ghosn to return yacht and $32 million

Nissan won the first round in its long-brewing boat battle with former chairman Carlos Ghosn about who rightfully owns the indicted fugitive's superyacht, with a court ruling Ghosn illicitly siphoned millions from the carmaker to buy the 121-foot pleasure cruiser.

Ghosn was ordered to give up the vessel to Nissan Motor Co., while he, his wife and a company they created as a vehicle to purchase the yacht were ordered to pay $32 million in damages, according to the ruling by the British Virgin Islands High Court.

The Custom Line Navetta 37 yacht built by the Italian boat maker Ferretti was christened "Shachou," or Japanese for "The Boss." The boatbuilder's company catalog listed the model as having seven bathrooms, five main cabins and four cabins for crew.

The yacht became a symbol of the alleged self-serving excesses at the crux of misconduct accusations against Ghosn, who was arrested in 2018 at the height of his power as chairman of the Renault-Nissan-Mitsubishi alliance, then the world's biggest automotive group.

The boat also featured in the final of four criminal indictments brought against Ghosn by Japanese prosecutors. Ghosn has yet to stand trial in Japan on the criminal counts. After 140 days of lockup on two separate stints in a Tokyo jail, Ghosn jumped bail and fled Japan to his ancestral homeland of Lebanon. He continues to live there with an Interpol red notice seeking his arrest.

The British Virgin Islands court contest covered an alleged flow of some $32 million from Nissan's CEO Reserve Fund through a complex chain of intermediaries, including a regional subsidiary, Nissan Middle East, into various entities controlled by Ghosn or his family members.

Some of the money was traced to Shogun Investments, a California company owned by Ghosn and his son, and to Beauty Yachts Pty, the company incorporated in the British Virgin Islands to buy the yacht and later owned by Ghosn's wife, Carole, according to the court's Aug. 9 decision.

"It is in the Court's respectful judgment clear as a matter of fact that the sums paid away from Nissan/NME [Nissan Middle East] were for purposes other than the proper purposes of Nissan or NME; and the payments to Mr. Ghosn, Beauty Yachts and Shogun were made in order to benefit Mr. Ghosn or his nominees," High Court Judge Gerhard Wallbank wrote in the 56-page judgment.

Ghosn, 70, who denies any wrongdoing, told Automotive News he was “obviously appealing” the decision. Neither he nor his wife attended the trial or were represented there.

Ghosn was arrested in November 2018 in a sting after he landed at Tokyo’s Haneda airport on a regular business trip. He says the charges of financial misconduct were concocted to block Nissan's fuller integration with its longtime French partner Renault, a plan he was working on at the time.

Nissan applauded the decision as confirming its claims that Ghosn misappropriated funds.

"This is a part of Nissan's efforts to recover damages suffered due to Carlos Ghosn's misconduct, including the misappropriation of Nissan's assets and etc. through legal proceedings including lawsuits in Japan and overseas," the Japanese carmaker said in a statement.

"Nissan will continue such efforts to make Carlos Ghosn accountable for his misconduct."

The British Virgin Islands case is one of several ongoing civil and criminal showdowns that continue to grab headlines as they grind through courts worldwide, nearly six years after Ghosn's stunning arrest upended the Franco-Japanese alliance he spent two decades building.

American former Nissan director Greg Kelly, the accused co-conspirator in a portion of Ghosn's alleged wrongdoing, is pursuing an appeal of his criminal conviction on one of eight counts against him. Kelly's defense team made its closing argument Sept. 19. At the same time, prosecutors are appealing the seven counts on which Kelly was cleared by the lower court's initial ruling in 2022.

A ruling in that case is expected Feb. 4.

Meanwhile, French authorities issued an arrest warrant for Ghosn in 2022, alleging he diverted millions of euros from Renault for his personal gain through a scheme with an auto distributor in Oman. That charge mirrors a similar allegation made by Japanese prosecutors regarding Nissan.

Ghosn is also fighting a ¥15.5 billion ($102.5 million) civil claim leveled by Nissan in a Yokohama court. And for his own part, Ghosn has filed suit against Nissan in a Lebanon court claiming $1 billion in damages and lost compensation.

Ghosn has been living in Lebanon since fleeing Japan in a dramatic dark-of-night escape, hidden in an audio equipment case, in December 2019. Despite being a wanted man in Japan and France, Ghosn holds a Lebanese passport, and Lebanon does not extradite its citizens.