Ghosn story – new evidence may back fugitive Nissan boss’s claim of a set-up
CARLOS GHOSN always said he was set up. Now there is some evidence to support his claim.
According to people familiar with what happened and previously unreported internal correspondence, the campaign by top Nissan executives to dethrone one of the most celebrated leaders in the automotive industry started almost a year before Ghosn’s arrest in late 2018 for alleged financial misconduct.
It was motivated in part by opposition to his push for greater integration between the Japanese carmaker and long-time partner Renault, the new information reveals.
While Nissan has long maintained the decision to oust Ghosn turned on allegations of under-reporting his income and other financial transgressions levelled by prosecutors, the documents and recollections of people familiar with what transpired show a powerful group of insiders saw his detention and prosecution as an opportunity to revamp the relationship with top shareholder Renault on terms more favourable to Nissan.
A chain of emails dating back to February 2018 paints a picture of a methodical campaign to remove a powerful executive. The information comes to light as another former Nissan executive and the firm itself face a looming trial in Tokyo, and as Japan seeks the extradition of Ghosn (66), who fled to Lebanon in a daring escape.
Alarmed by Ghosn’s pledge in early 2018 to make the alliance between the companies irreversible, senior managers at the Japanese carmaker discussed their concern at how the chairman of both Nissan and Renault was taking steps toward further convergence.
At the centre of those discussions was Hari Nada, who ran Nissan’s chief executive’s office and later struck a cooperation agreement with prosecutors to testify against Ghosn. Nissan should act to “neutralise his initiatives before it’s too late,” Nada wrote in mid-2018 to Hitoshi Kawaguchi, a senior manager at Nissan responsible for government relations.
Ghosn has said he is innocent of the four charges of financial misconduct and breach of trust.
Nissan said that while discussions over the structure of the alliance occurred many months before Ghosn’s arrest, “any argument that the discovery of Carlos Ghosn’s misconduct formed part of a conspiracy to undercut or terminate Nissan’s alliance with Renault is entirely false”.
“We have been made aware of numerous documents repeatedly circulated to the media that we suspect were forged or falsified to suggest that they were sent by Nissan individuals,” Nissan said.
On November 18, 2018, the day before Ghosn was seized on a private jet at Tokyo’s Haneda Airport, Nada circulated a memo to then CEO
Hiroto Saikawa, according to people familiar with the document. Nada called for termination of the agreement governing the alliance and the restoration of the Japanese company’s right to buy shares in Renault, or even take it over. Nissan would also seek to abolish the French carmaker’s right to nominate Nissan’s chief operating officer or other more senior positions.
Renault had saved the Japanese manufacturer from bankruptcy with an emergency cash injection in 1999. That is when the French firm dispatched Ghosn to Nissan, who pulled off one of the most dramatic salvage jobs in car industry history.
Yet, after two decades, with Ghosn dividing his time between the companies as CEO of Renault and chairman of the alliance, Nissan began to stumble.
Nada told Saikawa in April 2018 that Ghosn was becoming increasingly agitated about Nissan’s performance and comments by his handpicked successor, who said he saw “no merit” in a merger between Renault and Nissan. “He can create a major disruption and you may become a victim of it,” Nada wrote
Ghosn was charged in Japan with under-reporting about $80m (€70.8m) in income and funnelling money from Nissan without the firm’s knowledge into entities he controlled. Calling the Japanese legal system a sham, Ghosn escaped the country late last year by sneaking aboard a private jet in a box, making his way to Lebanon via Turkey.
Former Nissan executive and board member Greg Kelly was arrested the same day as Ghosn and remains on bail in Japan. He is awaiting trial on charges he helped Ghosn under-report his income. Prosecutors also charged Nissan in the first round of indictments.
Nada, a Malaysia-born lawyer who oversaw many of Ghosn’s affairs at Nissan, led an internal probe and was implicated in some of the alleged conduct being investigated by the Tokyo prosecutor. At the same time, emails show how Nada worked to gather information, travelling to Brazil and Lebanon to investigate Ghosn’s use of company-provided homes.
When asked to comment, Saikawa referred to previous statements rejecting the existence of a plot to oust Ghosn. “There was no effort to remove Renault’s influence” by removing Ghosn, Saikawa said after the former chairman accused Nissan executives of conspiring against him.
Saikawa stepped down in September after a Nissan investigation found he had been paid excess compensation. Nada, and other executives, were also overpaid, an internal probe found last year.
As the date neared for the planned arrests of Ghosn and Kelly, preparations were made to assess how Renault’s board would react and how to respond if the French company asserted its position.
Nissan should make it clear to Renault that the French firm had no right to involve itself in the operations of its alliance partner, Nada said.
The contract binding the partnership, called RAMA, as well as a Netherlands-based entity called Renault-Nissan, created to oversee its governance, should both be abolished as a result of Ghosn’s arrest, Nada asserted. That would give Nissan the right to acquire Renault shares in order to disenfranchise Renault or take it over, he is said to have written.
TheRAMAhaslongbeena source of friction between Nissan and Renault. The French firm can exercise full voting rights with its Nissan shareholding, while the Japanese car firm holds only a 15pc stake in Renault and lacks the ability to vote its shares. Moreover, the French state owns 15pc of Renault with double voting rights, giving it indirect sway over the Japanese company.
Months after the arrests, Nissan was able to secure changes to the partnership with Renault but the new agreement didn’t alter the alliance as much as Nada had proposed. While Nissan won more say over executive appointments and eliminated Ghosn’s former post of alliance chairman, the shareholding structure remained intact. But the damage was done – the relationship was left in tatters.
Later last year, Nissan withheld its endorsement for Renault’s pursuit of a 50-50 merger with Fiat Chrysler, scuttling a bid to create a carmaker potentially worth €35bn.
While there’s been a ceasefire of sorts since then, the lopsided shareholding structure remains unresolved. The companies announced measures aimed at closer operational integration last month, as they seek to weather the pandemic.
After Saikawa left last September, a new triumvirate was put in place to run Nissan, only to see one member, co-COO Jun Seki, resign soon after he lost out on the top job. CEO Makoto Uchida and COO Ashwani Gupta are now left to face the monumental task of turning around the maker of the Leaf electric car and the Qashqai SUV.
Then there is Ghosn himself. The former CEO and chairman, who is living in Beirut at a house bought by Nissan, has vowed to restore his reputation and prove his innocence.
Japan says it will keep seeking to bring Ghosn to justice, but the country doesn’t have an extradition treaty with Lebanon and he is unlikely to ever face a Japanese courtroom.
‘He can create major disruption and you may become a victim’ Campaign to dethrone one of auto industry’s leading figures