Fortune USA 201901-02

PAGE

3

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FORTUNE.COM// JA N.1.

gered international

headlines, prosecution

of CEOs is rare—even

rarer than in the U.S.,

which in past decades

convicted executives

like Jeffrey Skilling of

Enron, Michael Milken

of Drexel Burnham

Lambert, and Bernard

Ebbers of WorldCom.

“In fact, it would be

easier to make a list

of people whoweren’t

prosecuted for white-

collar crime,” says Ul-

rike Schaede, professor

of Japanese business at

the University of Cali-

fornia at San Diego’s

School of Global Policy

and Strategy.

Examples abound of

Japanese scandals in

which executives resign

but aren’t punished.

No one went to jail in

Toshiba’s $1.2 billion

accounting scandal,

for instance. At the

regional Suruga Bank,

executives weren’t pros-

ecuted for a scheme

last year that forced

unwanted accounts on

unwitting customers.

(The case has been lik-

ened to the imbroglio

at Wells Fargo where,

you guessed it, no one

has gone to jail.) And

in a 2011 scandal at

camera maker Olym-

pus, a newly installed

British CEO blew the

whistle on a massive

fraud. He was fired,

but his predecessor

wasn’t charged with

wrongdoing.

Says Schaede of the

Ghosn and Olympus

scandals, “The worry

is that this means

Japan will have trouble

attracting foreign

talent in the executive

lounge. It smacks of

getting thegaijin—the

Japanese word for for-

eigner, literally ‘outside

person’—out of Japan.”

China is arguably

a special case. Execu-

tives routinely go miss-

ing, typically caught

up in the “anti-corrup-

tion” dragnet initi-

ated by the country’s

President, Xi Jinping.

Alibaba, which noted

in its securities filing

that its executive Yang

had been removed

from his position the

week before he was

taken into custody,

says it is cooperating

with authorities—and

little else.

If criminal convic-

tions aren’t necessarily

on the rise, there at

least is a sense that

prosecutors and legis-

lators are beginning to

take the subject more

seriously. “There’s a

global conversation

about the right way to

approach corporate

crime,” says Garrett,

theToo Big to Jail

author. He notes in

particular legislative

activity in Canada,

France, Ireland, and

the U.K. around

corporate crime, and

kernels of interest in

countries like Taiwan,

Spain, and Brazil,

where his book has

been translated.

The incarcerated

CEO remains a rare

bird, in other words—

but he or she may soon

be less of a black swan.

Yang Weidong

President

Alibaba’s Youku

Formerly the

head of Alibaba’s

music-streaming

affiliate and a

onetime Nokia

executive, Yang

was arrested in

China for “alleged

acceptance of

illegal payments.”

Little else is

known about his

situation.

Carlos Ghosn

Chairman

Nissan

Japanese authori-

ties have charged

Ghosn with

underreporting

his income; he

remains in jail as

of this writing. The

auto executive is

reviled by some in

Japan as a symbol

of corporate

greed and revered

by others for sav-

ing Nissan.

Oliver Schmidt

General Manager

Volkswagen

AGermancitizen,

he worked in

Michigan for

Volkswagen.

Schmidt pleaded

guilty in 2017

to violating the

Clean Air Act in the

course of his com-

pany’s emissions-

fraud scandal. He

is serving a seven-

year prison term.

Meng Wanzhou

Chief financial

officer,Huawei

The Huawei

executive’s arrest

in Canada for

alleged violations

of U.S. sanc-

tions on Iran has

become linked

to the U.S.-China

trade dispute. She

is free on bail in

Canada, awaiting

extradition.

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