Dramatic downfall of Carlos Ghosn reverberates in Lebanon

Nissan chairman Carlos Ghosn was arrested in Tokyo on November 19, 2018 for financial misconduct, public broadcaster NHK and other Japanese media outlets reported. (File/AFP)
Updated 02 December 2018
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Dramatic downfall of Carlos Ghosn reverberates in Lebanon

  • Lebanon has long held hopes that Ghosn would play a bigger role in politics one day, or help rescue its increasingly sluggish economy
  • The country’s economy is struggling, with experts warning it is dangerously close to collapse after decades of mismanagement, corruption and nepotism

BEIRUT: He may have fallen from grace internationally as one of the auto industry’s most powerful leaders, but Carlos Ghosn can count on continued support in at least one corner of the globe.
Lebanon has long held hopes that Ghosn, whose grandparents were Lebanese and who holds extensive development projects in the country, would play a bigger role in politics one day, or help rescue its increasingly sluggish economy.
But Ghosn, ex-chairman of Nissan Motor Co., was detained last month on allegations of underreporting his income, and on Friday, a Japanese court approved extending his detention for 10 more days.
Now, politicians across the board are mobilizing in his defense, with some suggesting his detention may be part of a political or business-motivated conspiracy, and the government even considering extraditing him from Tokyo to face trial here.
“To Carlos Ghosn in his predicament I say, a Lebanese phoenix will not be scorched by the Japanese sun,” Interior Minister Nohad Machnouk said at a security conference in Beirut this week.
Lebanon, a tiny country of 4.5 million, takes excessive pride in its huge emigrant community and successful businessmen and celebrities of Lebanese heritage. They include Mexican business magnate Carlos Slim, Columbian singer Shakira, Mexican-American actress Salma Hayek, Lebanese-British barrister Amal Clooney and fashion designers Elie Saab and Reem Accra.
The Lebanese took special pride in the auto industry icon, who holds a Lebanese passport, speaks fluent Arabic and visits regularly, including a last visit right before he was detained in Tokyo. Born in Brazil, where his Lebanese grandfather had sought his fortune, Ghosn grew up in Beirut, where he spent part of his childhood at a Jesuit school.
As he began his ascent in the auto industry, first with Renault and then by bringing Nissan in Tokyo back from the brink of bankruptcy, Ghosn kept in touch with old friends. He married twice, first to a Lebanese woman who resides in Beirut and again in 2016 to Carole Nahas, also of Lebanese heritage.
As a Maronite Christian, Ghosn’s name occasionally popped up as a possible candidate for the presidency, but he repeatedly dismissed suggestions he would run for office, saying he is not a politician. The post of president is reserved for a Christian in Lebanon’s sectarian-based system of government.
Although the extent of his businesses in Lebanon is not known exactly, Ghosn has spoken in interviews about various real estate projects in the country and sits on the board of several universities, hospitals and charities. In 2012, he became a partner in the Lebanese winery IXSIR, and is a board member of family-owned Saradar Bank.
In 2017, the government honored him with a special postage stamp — a show of respect to a man considered a model of Lebanese entrepreneurial spirit.
So when news broke on Nov. 19 that Ghosn, 64, had been detained on allegations he underreported millions of dollars in income, and that Nissan is accusing him of using company money for personal gain, people in Lebanon were stunned — and many were unconvinced.
Lebanese Foreign Minister Gibran Bassil promptly issued a statement saying Lebanon would stand by Ghosn, adding he had asked the Lebanese ambassador to Tokyo to look out for “the model of Lebanese success abroad.” The ambassador has since reportedly met three times with Ghosn — who is being held in a small cell in the Japanese capital — providing him with a mattress and food in the form of salmon, according to one report on a local TV channel.
Ghosn’s dramatic downfall has sparked various conspiracy theories, with some claiming that his arrest was a U.S. ploy to punish him for resisting sanctions on Iran and others speculating it was an internal coup engineered by Nissan executives.
Melhem Riachi, the information minister, urged officials to intervene with the government of Japan, tweeting: “An investigation is extremely important. Something stinks.”
Allegations against Ghosn reported in the Japanese media, but unconfirmed, suggest he spent Nissan funds on fancy homes in Paris, Beirut, Rio de Janeiro and Amsterdam, and on family vacations and other personal expenses. Ghosn has denied the allegations against him, saying he had no intention of underreporting his income, the reports say.
Ghosn’s three-story property in one of Beirut’s most prized real estate districts stands out for its pink walls and blue shuttered windows. The traditional old Lebanese house was acquired and renovated in 2014, according to neighbors who said they occasionally saw him visiting.
“He is a successful businessman with a good reputation ... he is not someone you would expect to be a cheat,” said Rouba Rabah, who owns an art gallery opposite Ghosn’s property.
Another neighbor who declined to give his name said he was stunned by the news like every other Lebanese would be, recalling how he would see Ghosn personally overseeing the renovation work four years ago.
Lebanese businessmen, many of them personal friends of Ghosn, have rallied around him, even after he was stripped of his title as chairman at Nissan and at Japanese partner Mitsubishi Motors Corp.
A group of Lebanese lawyers is now considering forming a team for his defense, and Justice Minister Salim Jreissati told Lebanon’s daily An-Nahar that the government is considering asking Japan to extradite Ghosn to face trial on Lebanese soil.
Lawyer Amal Haddad told The Associated Press that she and the current head of the Lebanese Lawyers’ Syndicate, Andree Chidiac, were considering the options. “That’s all I can say until we are formally assigned the case,” Haddad said.
In Ghosn’s downfall, many here see a lost opportunity. The country’s economy is struggling, with experts warning it is dangerously close to collapse after decades of mismanagement, corruption and nepotism.
Cabinet Minister Mouin Merhebi said that Ghosn’s arrest is regrettable.
“He is an important personality, an economic personality we had hoped would one day play a role in Lebanese political life, a role to salvage Lebanon,” he told the AP.


Egypt’s middle class cuts costs as IMF-backed reforms take hold

Updated 17 November 2024
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Egypt’s middle class cuts costs as IMF-backed reforms take hold

  • The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies

Cairo: Egypt’s economy has been in crisis for years, but as the latest round of International Monetary Fund-backed reforms bites, much of the country’s middle class has found itself struggling to afford goods once considered basics.
The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies.
On the ground, that has translated into an eroding middle class with depleted purchasing power, turning into luxuries what were once considered necessities.
Nourhan Khaled, a 27-year-old private sector employee, has given up “perfumes and chocolates.”
“All my salary goes to transport and food,” she said as she perused items at a west Cairo supermarket, deciding what could stay and what needed to go.
For some, this has extended to cutting back on even the most basic goods — such as milk.
“We do not buy sweets anymore and we’ve cut down on milk,” said Zeinab Gamal, a 28-year-old housewife.
Most recently, Egypt hiked fuel prices by 17.5 percent last month, marking the third increase just this year.
Mounting pressures
The measures are among the conditions for an $8 billion IMF loan program, expanded this year from an initial $3 billion to address a severe economic crisis in the North African country.
“The lifestyle I grew up with has completely changed,” said Manar, a 38-year-old mother of two, who did not wish to give her full name.
She has taken on a part-time teaching job to increase her family’s income to 15,000 Egyptian pounds ($304), just so she can “afford luxuries like sports activities for their children.”
Her family has even trimmed their budget for meat, reducing their consumption from four times to “only two times per week.”
Egypt, the Arab world’s most populous country, is facing one of its worst economic crises ever.
Foreign debt quadrupled since 2015 to register $160.6 billion in the first quarter of 2024. Much of the debt is the result of financing for large-scale projects, including a new capital east of Cairo.
The war in Gaza has also worsened the country’s economic situation.
Repeated attacks on Red Sea shipping by Yemen’s Houthi rebels in solidarity with Palestinians in Gaza have resulted in Egypt’s vital Suez Canal — a key source of foreign currency — losing over 70 percent of its revenue this year.
Amid growing public frustration, officials have recently signalled a potential re-evaluation of the IMF program.
“If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF,” President Abdel Fattah El-Sisi said last month.
Prime Minister Mostafa Madbouly also ruled out any new financial burdens on Egyptians “in the coming period,” without specifying a timeframe.
Economists, however, say the reforms are already taking a toll.
Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, said they led to “a significant erosion in people’s living conditions” as prices of medicine, services and transportation soared.
He believes the IMF program could be implemented “over a longer period and in a more gradual manner.”
’Bitter pill to swallow’
Egypt has been here before. In 2016, a three-year $12-billion loan program brought sweeping reforms, kicking off the first of a series of currency devaluations that have decimated the Egyptian pound’s value over the years.
Egypt’s poverty rate stood at 29.7 percent in 2020, down slightly from 32.5 percent the previous year in 2019, according to the latest statistics by the country’s CAPMAS agency.
But Gamal said the current IMF-backed reforms have had a “more intense” effect on people.
“Two years ago, we had no trouble affording basics,” said Manar.
“Now, I think twice before buying essentials like food and clothing,” she added.
Earlier this month, the IMF’s managing director Kristalina Georgieva touted the program’s long-term impact, saying Egyptians “will see the benefits of these reforms in a more dynamic, more prosperous Egyptian economy.”
Her remarks came as the IMF began a delayed review of its loan program, which could unlock $1.2 billion in new financing for Egypt.
Economist and capital market specialist Wael El-Nahas described the loan as a “bitter pill to swallow,” but called it “a crucial tool” forcing the government to make “systematic” decisions.
Still, many remain skeptical.
“The government’s promises have never proven true,” Manar said.
Egyptian expatriates send about $30 billion in remittances per year, a major source of foreign currency.
Manar relies on her brother abroad for essentials, including instant coffee which now costs 400 Egyptian pounds (about $8) per jar.
“All I can think about now is what we will do if there are more price increases in the future,” she said.


Iraq blast kills three security personnel: officials

Updated 17 November 2024
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Iraq blast kills three security personnel: officials

A blast from an explosive device on Sunday killed three members of Iraq’s security forces and wounded three others in the northern province of Salaheddin, officials said.
There was no immediate claim of responsibility for the attack in Tuz Khurmatu, which borders a province plagued by sporadic jihadist attacks.
Iraq declared victory over the Daesh group in late 2017, but its jihadists remain active in the country, particularly in rural areas.
Sunday’s blast killed an army regiment commander, another officer and a security service member, said Zulfiqar Al-Bayati, mayor of Tuz Khurmatu.
A security official confirmed the death toll to AFP, adding the victims had been in a vehicle when the explosion occurred.
Those killed were members of the Peshmerga forces of the autonomous northern region of Kurdistan, while the wounded were members from the Iraqi army.
The Iraqi defense ministry paid tribute to the three soldiers who “fell as martyrs... while carrying out their duty.”
The Daesh group overran large swathes of Iraq and neighboring Syria in 2014, proclaiming its “caliphate” and launching a reign of terror.
It was defeated in Iraq in 2017 by Iraqi forces backed by a US-led military coalition, and in 2019 lost the last territory it held in Syria to US-backed Kurdish forces.
A report by United Nations experts published in July estimated there were around 1,500 to 3,000 jihadists remaining in Iraq and Syria.


Gaza civil defense says 26 dead, 59 missing after Israeli air strike

Updated 17 November 2024
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Gaza civil defense says 26 dead, 59 missing after Israeli air strike

  • The Gaza health ministry said 43,799 people have been confirmed dead since Oct. 7, 2023

GAZA STRIP: Gaza’s civil defense said 26 people were killed on Sunday, including children, and at least 59 were missing after an Israeli air strike hit a building in the Palestinian territory’s north.
Following the strike early Sunday, 26 bodies were pulled from the rubble of the five-story residential building in Beit Lahia, “including children and women,” civil defense spokesman Mahmud Bassal told AFP.
He added that at least 59 people were still trapped under the debris.
AFP images showed men covered in dust scrambling to reach people under the rubble, while some of the bodies were taken away on a donkey-pulled cart.
Other AFP images showed the flattened building with broken concrete and twisted metal sticking out from the ruins as more bodies covered in blankets lay nearby.
Hamas, which runs the territory, accused Israel of committing a “massacre” which it said is “a continuation of the genocidal war and revenge against unarmed civilians.”
Earlier on Sunday, Gaza’s civil defense said other Israeli strikes killed at least 20 people, including four women and three children, across the war-torn territory.
Hamas-run Gaza’s health ministry on Sunday said the overall death toll in more than 13 months of war had reached 43,846.
The majority of the dead are civilians, according to ministry figures, which the United Nations considers reliable.
Hamas’s October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.


Hezbollah spokesman killed in Israel strike on Beirut

A Lebanese security source said Hezbollah spokesman Mohammed Afif was killed in an Israeli strike Sunday in central Beirut.
Updated 17 November 2024
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Hezbollah spokesman killed in Israel strike on Beirut

  • “The strike on Ras Al-Nabaa killed Hezbollah media relations official Mohammed Afif,” the security source said
  • Ali Hijazi, secretary-general of the Lebanese branch of the Baath party, “confirmed the death of Hezbollah media official” Afif

BEIRUT: A Lebanese security source said Hezbollah spokesman Mohammed Afif was killed in an Israeli strike Sunday in central Beirut that hit the Lebanese branch of the Syrian Baath party.
“The strike on Ras Al-Nabaa killed Hezbollah media relations official Mohammed Afif,” the security source said, requesting anonymity as they were not authorized to brief the media.
Ali Hijazi, secretary-general of the Lebanese branch of the Baath party, “confirmed the death of Hezbollah media official” Afif, the official National News Agency reported.
The Israeli army declined to comment.
Lebanon’s health ministry said the strike killed one person and wounded three others, adding that the toll was provisional and that work was ongoing to remove rubble from the site of the strike.
Afif for years had been responsible for Hezbollah’s media relations, and provided information to local and foreign journalists under the cover of anonymity.
The NNA said the strike by “enemy aircraft” caused “great destruction,” reporting an unspecified number of people “trapped under the rubble” in Ras Al-Nabaa, an area near the French embassy and a university.
It said “one of the residents of a neighboring building had received a warning call urging evacuation but it was not taken seriously.”
Since the assassination in late September of longtime Hezbollah chief Hassan Nasrallah in a huge Israeli strike, Afif had held several press conferences in Beirut’s southern suburbs.
In one such event last month, Afif announced that Hezbollah had launched a drone targeting the residence of Israeli Prime Minister Benjamin Netanyahu.
That press conference was cut short when the Israeli army warned it would strike a building nearby.


Israeli military reports soldier killed in battle north of Gaza on Saturday

Updated 17 November 2024
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Israeli military reports soldier killed in battle north of Gaza on Saturday

CAIRO: The Israeli military said on Sunday that a fighter in the Nachshon Regiment (90), Kfir Brigade, was killed in battle north of Gaza on Saturday.