(Bloomberg) — On Christmas Eve, Carlos Ghosn walked into his lawyers’ modest office in central Tokyo to speak to his wife, Carole, for only the second time since April. During his long odyssey through the Japanese legal system—several arrests, more than 100 days in solitary confinement, seemingly endless interrogations, and, after his release on bail, intrusive 24-hour surveillance—Ghosn had been forced to accept many humiliations. But few demoralized the ousted leader of Nissan Motor Co. and Renault SA as much as having to seek court permission even to call his spouse, who prosecutors viewed as a potential co-conspirator in some of the wide range of financial crimes with which he’s been charged.
Carole, who’d departed Japan in a hurry after her husband was taken into custody on a fourth charge in early April, has spent much of the last year lobbying tirelessly on his behalf—a campaign that was taking an obvious toll. “They’ve destroyed our lives, we are scarred forever,” she said of Ghosn’s accusers in a November interview with Bloomberg Television. “It’s been the hardest year of my life.” They were allowed to speak for one hour, but it wasn’t enough; they still had much more to say to each other. As time ran out, according to one of Ghosn’s lawyers, who described the call on his blog, the fallen executive signed off with a simple “I love you, habibi,” an Arabic term of affection.
It seemed impossible to know when the couple would next have a chance to speak, let alone embrace. The following day, the 65-year-old Ghosn learned that the second of his two trials might begin only in 2021, raising the prospect of another year or more in court-imposed isolation. Even his children were being targeted by investigators. Japanese prosecutors had questioned Ghosn’s son Anthony, who was involved in some of the transactions they were targeting, as well as one of his daughters, according to a person familiar with the matter. Fearing arrest, Anthony had been unable to visit his father.
Ghosn’s prospects of proving his innocence in Japan were dismal. Prosecutors there win more than 99 percent of the cases they try and enjoy a wide range of procedural advantages. Against Ghosn, who was facing potential sentences of more than a decade in prison, they had an even greater-than-usual asset: the full co-operation of Nissan, which had repeatedly made clear its determination to see him convicted and had provided a huge trove of documents as well as hands-on investigative assistance. Ghosn, a citizen of Brazil, France, and Lebanon, had sought diplomatic help from all three countries. Only the last had acted with evident enthusiasm, but its efforts weren’t getting anywhere.
Ghosn, however, had another option—a desperate play, months in the planning, that might restore some portion of his freedom if everything went right, or send him straight back to a 7-square-meter (75-square-foot) cell in Tokyo’s central jail if any aspect went awry. In the Middle East, a former U.S. Army Green Beret and a veteran of the 2003 invasion of Iraq were preparing a daring plan to spirit Ghosn out of Tokyo, under the noses of Japanese police. They aimed to bring him back to Beirut—the city where he had spent most of his childhood, and the capital of a country where, thanks to his business success, Ghosn is considered something of a national hero.
On its face, it must have seemed like a ridiculous idea. While the terms of Ghosn’s bail did not include a requirement to wear an ankle bracelet or other electronic tracker, his movements were closely monitored. Prosecutors had trained a camera on the door of his rented house, in Tokyo’s busy Roppongi neighborhood, and as he moved through the Japanese capital he was shadowed by teams of plainclothes agents. Ghosn, who has bushy eyebrows, elongated ears and prominent sideburns, would have a memorable face even as a regular citizen, but two decades of corporate celebrity meant that he was perhaps the most recognizable foreigner in Japan. His chances of slipping undetected through Tokyo and onto an airplane would have seemed slim, to put it mildly.
Yet there was a clear window of opportunity. New Year’s is typically the longest holiday of the year in Japan, a time when government offices can close for more than a week and even the most hard-boiled prosecutors and police detectives take time off to be with their families. Moreover, Ghosn had good reason to believe he could evade at least some of the men monitoring his movements: his lawyers had recently threatened to file a complaint against a private security company hired by Nissan to follow him, claiming it was infringing illegally on his rights. According to a person familiar with the situation, the company’s agents had backed off as a result—at least temporarily. (Nissan declined to comment.) If Ghosn was going to escape, this was the moment to do it. But he needed the right help.
In the shadowy world of private-security contractors, Michael Taylor was a swashbuckler who stood out. He protected powerful people and companies, secretly helped the U.S. government investigate crimes, and admitted breaking the law himself. A veteran of the U.S. Army’s elite Special Forces—the famed Green Berets—Taylor in 1994 founded American International Security Corp., a Boston-area contractor that provided security for oil drilling operations and corporate executives, and rescued abducted children among other assignments. He was hired by The New York Times to mount a rescue of David Rohde, a correspondent who’d been kidnapped in 2008 in Afghanistan. (Rohde ultimately escaped on his own). He also worked as an undercover asset for the Federal Bureau of Investigation, the Drug Enforcement Administration and other federal bodies.
Taylor’s career seemed to be prospering in 2007 when his firm secured a Pentagon contract, which eventually paid out $54 million, to train Afghan special-forces troops. But in 2012, his fortunes took a dramatic turn for the worse. He was charged in Utah with an FBI agent over a plot to obstruct a fraud investigation of whether the Afghan contract was awarded improperly. Taylor ultimately pleaded guilty to two fraud charges and was sentenced to two years in prison. It wasn’t his first guilty plea. In 1997, he admitted two misdemeanor charges in Massachusetts related to a police report filed in a domestic case in which he’d been hired, his lawyers said.
Much of Taylor’s work over the years had, improbably enough, involved Lebanon. Taylor was born on Staten Island and graduated high school in Massachusetts, but over the years he developed deep ties to Ghosn’s home country. He was deployed to Beirut during the Lebanese civil war, beginning what his lawyers said was “a lifelong relationship with the Christian community in Lebanon”—the same community of which Ghosn is a prominent member. Fit, square-jawed and with silver hair, Taylor speaks Arabic, his wife Lamia is Lebanese, and two of their three sons attended college in Lebanon.
For the Ghosn operation, Taylor had a partner, a Lebanese-born man named George-Antoine Zayek. Originally trained as a gemologist, his brother said by telephone, Zayek was also a member of a Christian militia when he met Taylor in the early 1980s, according to a person familiar with the matter, a time when Lebanon had fractured violently along sectarian lines. Zayek appears to have been associated with Taylor and his companies since the 1990s, based on public records in the U.S. According to his brother, however, Zayek left Lebanon at the start of the invasion of Iraq in 2003, when he began working for a private security company there. Taylor couldn’t be reached for comment and Zayek didn’t respond to multiple voicemail messages seeking comment.
On the morning of Sunday, Dec. 29, Taylor and Zayek arrived in a Bombardier Global Express Jet—a plane with a range of more than 11,000 kilometers (6,800 miles)—at the private-jet terminal of Kansai International Airport, a busy hub built on an artificial island near Osaka. There were also two large black cases on board, according to people familiar with the flight who asked not to be identified.
Later the same day, according to security-camera footage reported on by Japanese media, Ghosn walked out the front door of his house, wearing a hat and a surgical-style face mask commonly used in Japan to protect against germs. He then took a bullet train from Tokyo’s Shinagawa station to Osaka at about 4:30 p.m. local time and, after the journey, took a cab to a hotel near the airport, the network NTV reported. That evening the same Bombardier jet took off from Kansai bound for Istanbul. According to a person familiar with the investigation of the flight, the team believed that flying straight to Beirut, a city that receives few if any arrivals from Osaka, would raise too many suspicions.
Outbound passengers at the private terminal aren’t exempt from passport control, and according to people familiar with airport operations, there were customs and immigration officials present before the Bombardier’s departure. But Ghosn wasn’t boarding as an official passenger. He was, apparently, cargo, concealed in a large black case that, according to the people, was too big to fit into the airport’s X-ray machines. With nothing obviously amiss, by 11:10 p.m., the jet was in the air.
Reaching Istanbul’s Ataturk Airport would take just over 12 hours. The team ferrying Ghosn appeared to have chosen its route carefully. From Osaka the plane headed north-northwest, avoiding South Korea—which has an extradition treaty with Japan—and then crossing into Russian airspace, where it remained for almost its entire journey. That wasn’t the most direct route, which would have taken the jet over China, Mongolia, and Kazakhstan. But it did keep Ghosn over a country where he has considerable connections, thanks to his work rescuing AvtoVAZ, a troubled Soviet-era automaker that’s now part of the Renault-Nissan alliance. If the Japanese government demanded his plane be stopped, he might have hoped for sympathy, or at least stalling, from Moscow.
In fact, the Japanese authorities seemed to have no idea Ghosn was no longer in the country, and the Bombardier landed in Istanbul at around 5:30 a.m. local time on Dec. 30. Changing planes at Ataturk could expose Ghosn once again to detection. Just as at Kansai, according to a Turkish official who asked not to be identified discussing the details of the government’s subsequent investigation, Ghosn made the short trip inside a box. The second jet, a shorter-range Bombardier, took off shortly after for the brief flight to Beirut.
Safely on the ground in the country of his youth, Ghosn didn’t have to hide his identity. Although his lawyers had taken his travel documents as a condition of his bail, Ghosn had two French passports—a rare privilege, granted to citizens whose employment might require them to travel while also handing over a passport for visa applications. Ghosn had been able to keep the second one, under the condition that it remain in a plastic case secured by a combination lock for which only his lawyers had the code. According to a person familiar with it, the case wasn’t particularly sturdy, and with a hammer or drill and a bit of time it wouldn’t be difficult to crack open. His French passport in hand, Ghosn crossed into Lebanon legally.
Carole, who had been counting the days since the couple had last been together (just short of nine months) was in Beirut to see her family for Christmas when Ghosn landed. She rushed to meet him and kept him largely to herself until the couple met up with a few friends for a New Year’s Eve dinner. A photo showed them at a table sharing wine and Champagne. They looked, if only for a moment, like a normal couple with normal concerns.
Even Ghosn’s closest advisers were blindsided when news of his escape began to break on Dec. 31. His Japanese lawyers said they had no idea what he had planned; in an impromptu press conference outside his office, lead counsel Junichiro Hironaka seemed genuinely bewildered by what had just occurred, describing himself as “dumbfounded.” Ghosn’s U.S. representatives at Paul Weiss, the white-shoe New York law firm, had been kept similarly in the dark. So was Greg Kelly, the former Nissan executive who’d been taken into custody at the same time and remains in Tokyo, forbidden to leave the country before trial. (He denies wrongdoing). With no details forthcoming on how Ghosn managed to sneak out of Japan, media outlets around the world began speculating on a range of outlandish theories—the most widely circulated that he had left his house disguised as a very large musical instrument after hosting a troupe of Lebanese musicians for a holiday concert.
Ghosn’s public-relations apparatus, which includes top-drawer firms in New York and Paris, let most of the speculation go uncommented upon. That changed dramatically as reports began to appear suggesting that Carole Ghosn or other members of his family had helped plan his escape—which, if accurate, might expose them to criminal charges in Japan or elsewhere. On Jan. 2, Ghosn said in a statement that, somewhat improbably given the constant surveillance of his communications, “I alone arranged for my departure.” His family, he said, “had no role whatsoever.”
Even if that’s true, Ghosn had plenty of help from individuals who may now be at risk of serious legal repercussions. In Turkey, the authorities quickly detained seven people connected with the flights, including four pilots, and remanded most of them into custody. MNG Jet Havacilik AS, the company from which the aircraft were leased, also filed a criminal complaint and said an employee falsified records in order to hide the fact that they were ferrying a fugitive. Japan’s justice minister, meanwhile, announced the opening of an investigation into Ghosn’s escape, raising the prospect of charges for anyone who aided him. Nor is Ghosn entirely in the clear. While Lebanon is a nation that refuses, as a matter of policy, to extradite its citizens for trial abroad, he’s probably stuck there indefinitely. Japan has requested that Interpol issue a so-called Red Notice in Ghosn’s name, making it known to other law enforcement authorities that the country considers him a fugitive. His life as a globe-trotting member of the corporate elite is, at least for the foreseeable future, over.
A long-term life on the run isn’t easy, but it’s not impossible. Roman Polanski, the Rosemary’s Baby director who fled the U.S. in 1978 to avoid being imprisoned in an underage sex case, has lived openly in Europe ever since—protected by France’s similar policy against extraditing citizens—and he remains a celebrated if controversial filmmaker. But such an existence wouldn’t deliver what Ghosn seems to crave most: legal vindication. His lawyers intend to propose that he be tried on the Japanese allegations in Lebanon, with Tokyo prosecutors providing investigative files to allow their Beirut counterparts to bring the case, according to Ghosn’s Beirut attorney, Carlos Abou Jaoude. Such an arrangement would be all but unprecedented, and, for the Japanese government, deeply embarrassing: agreeing to it would amount to an admission that it won’t be able to get him back. Japanese prosecutors, meanwhile, would be certain to view a Lebanese trial as biased in favor of the defendant. Ghosn is one of Lebanon’s most celebrated citizens—his face is even on a postage stamp—and it’s hard to imagine a friendlier locale for a hearing.
Ghosn was awaiting trial in Japan on four charges—two for allegedly understating his compensation in regulatory filings, and two more “breach of trust” allegations, in which prosecutors claim he used Nissan’s resources for his own gain. From the beginning of his legal drama he’s denied wrongdoing and claimed that the allegations against him are the result of a political vendetta—an illegitimate attempt to settle scores and stop him from integrating Nissan more closely with Renault—that should never have put him in a courtroom, let alone a jail cell. According to people familiar with his intentions, he plans to use his freedom to assail the Japanese legal system and to do everything he can to publicly discredit the charges. His first salvo will come at a press conference he plans to hold in Beirut on Wednesday.
Throughout his career, Ghosn portrayed himself as a singular figure, the driving force behind the creation of one of the world’s largest automotive groups and the only person capable of keeping it together. In recent years he was clearly in legacy mode, preparing the groundwork for a deal that would finally bring Nissan and Renault together under a single corporate umbrella. Had his plans to incorporate rival Fiat-Chrysler into the alliance come to fruition, he might have created the world’s largest carmaker and reasonably expected to be remembered as a business visionary, one of the few individuals—like Lee Iacocca, Jack Welch or Gordon Moore—whose careers helped reshape their industries. For the foreseeable future, however, he will be known above all as something very different: a fugitive.
(Correcting the name of the Drug Enforcement Administration in this story originally published on Jan. 6.)
–With assistance from Dana Khraiche, Zeke Faux, Greg Farrell, David Kocieniewski, David Voreacos, Tsuyoshi Inajima, Neil Weinberg and Jeremy Diamond.
Canadian retail sales slow after surpassing pandemic losses – BNN
Gains for Canadian retailers slowed sharply in July and August, suggesting pent-up demand from prior months has been largely extinguished.
Sales grew 0.6 per cent in July, versus 23 per cent in June and 21 per cent in May, Statistics Canada said Friday in Ottawa. Excluding vehicles, receipts unexpectedly dropped 0.4 per cent, versus a forecast gain of 0.5 per cent. Preliminary estimates from the agency show receipts climbed 1.1 per cent in August, suggesting the weaker trend will continue.
The report reinforces warnings that the pace of the recovery will slow in the second half of the year, after a strong V-shaped rebound through the early summer.
“All in all, the numbers imply that retail activity is normalizing after the whipsaw of a huge downturn and recovery,” said Scotiabank economist Brett House in a note.
Core retail sales, or those excluding vehicles and gasoline, dropped 1.2 per cent.
Still, the rebound has been impressive. In July, retail sales were up 2.7 per cent compared with year earlier levels.
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Canadian airlines cancelling flights again as hoped-for bounceback in demand fizzles – CBC.ca
Rachel Farrell can now claim the unfortunate distinction of having two destination weddings called off in one year.
The 26-year-old event co-ordinator had booked a Transat flight out of Halifax for Feb. 15, 2021, as part of her planned nuptials in the Dominican Republic but was told this week the airline had cancelled the trip and would not make the journey until six days later.
She and her fiancé had first booked their trip package for last April, but it was nixed by Transat after the airline grounded its entire fleet due to the COVID-19 pandemic.
The problem is increasingly common, with Canadian airlines cancelling hundreds of flights as hopes for a spike in demand fall flat, snarling plans for the few passengers who remain.
“I was upset but understood that it wasn’t Air Transat’s fault, so we would wait until air travel resumed and rebook as soon as we could, since refunds weren’t an option,” Farrell said.
She did that in July, rebooking the flight for February using a travel credit based on the $37,000 she and her nearly two-dozen guests had paid for the package.
“Even though they knowingly chose to cancel my rebooked wedding group, they still won’t give us a refund,” Farrell said, noting the airline is again offering credit.
“My travel agent has told me that even if I rebook next week, they might still push the dates further…. I don’t know what to do now, and all I really want is to get married.”
Air Canada and WestJet have cancelled at least 439 flights so far this month, according to figures from flight data firm Cirium.
The cancellations come after airlines banked on a return of business travel and a continued uptick in leisure trips in the fall, said John Gradek, who heads McGill University’s Global Aviation Leadership program.
“They’ve decided since about the end of July to let loose on scheduled services and increasing the number of routes, at the same time hoping that the government will loosen up some of its restrictions. And that’s not been the case,” he said.
Now, airlines are cancelling the half-booked flights and consolidating passengers on remaining ones to cut costs.
“There has not been a take-up by the Canadian travelling public of those seats that are being offered by the carriers, so they’re cutting back those services significantly … and it’s being done piecemeal rather than being done wholesale,” Gradek said.
The letdown builds on an already devastating year.
Transat revenues fell by 99 per cent year over year in the last quarter, when the travel company operated flights for just one week.
Air Canada saw passenger revenues drop 95 per cent, prompting 20,000 layoffs as the airline burned through $19 million per day. WestJet has laid off about 4,000 employees since March.
Air traffic in August fell by two-thirds compared with a year earlier, according to Nav Canada, which operates air navigation across the country.
Flight consolidation does not always result in upended plans or wedding dilemmas.
“Sometimes airline schedules require minor surgery and sometimes major surgery,” said Mike Malik, head of marketing at Cirium.
The itinerary change can sometimes mean a departure delay of an hour rather than a week.
“We know that most travellers right now are not business travellers,” Malik said. “These are VFR travellers — visiting friends and relatives. So if you’re visiting friends and relatives, you probably don’t need a 7 a.m. flight for a 9 a.m. meeting in Toronto.”
The reassurance comes as cold comfort for Darlene Hatter, who was twice slated to attend her son’s destination wedding in Costa Rica, with both flights from Toronto now cancelled.
Her son, Robert Przybylski, 35, is now out $15,000, as well as the $2,800 each of his 85 guests shelled out, she said.
“It’s very frustrating,” Hatter said.
“The airlines in my opinion are taking advantage big time of this and stomping on the little people just because they can. The government needs to step up and tell these airlines to give people their refunds.”
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