Ghosn, going, gone
If anything, 2018 will go down as the year of corporate crookery. General Electric’s Latin America CEO was arrested for fraud, Danske Bank’s chief resigned over what was probably the largest-ever money-laundering scandal in history and Theranos, once the darling of Silicon Valley start-ups, went from a valuation of $4.5bn to $0 after its founder and its COO were charged with defrauding investors, doctors and patients.
I’d be remiss if I didn’t mention our own disgraced executive, Markus Jooste of Steinheist fame.
With New Year’s Eve fast approaching, one would assume that the sun had set on high jinks for the year. Alas, I present one more case of corporate impropriety. Nissan chair Carlos Ghosn (pronounced “gh-own”), one of the auto industry’s most powerful executives, was arrested in Japan this week after an internal investigation.
He will be fired for allegedly underreporting his income, using investment funds for personal gain and illicit use of company expenses. He’s the guy credited with having saved Nissan from collapse. He also earned the nickname “Le Cost Killer” after reviving French carmaker Renault. Most notably, he’s the chief architect behind the Renault-nissanmitsubishi alliance, the second-largest car group in the world behind Volkswagen, with sales of more than 10million cars a year.
A Brazilian-born French national, Ghosn was, as they say, “big in Japan”, appearing on magazine covers dressed in a kimono — his life story was even made into a manga comic, earning him a second moniker: “Mr Fix It”. He was not short of detractors though — labour unions and leftist politicians resented his fat salary.
His is a spectacular fall from grace. I have in my time seen some supremely awkward media conferences, and the one on Monday addressed by Nissan CEO Hiroto Saikawa (Ghosn’s protégé and colleague for decades) ranked among them. “I felt not just that it was regrettable, but much more strongly than that — I felt indignation and, personally, I keenly felt despair,” Saikawa said.
He apologised for at least seven minutes at the outset of the conference. “Too much authority was given to one person in terms of governance … I have to say that this is a dark side of the Ghosn era which lasted for a long time.”
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Driving force
Ghosn, 64, is also CEO and chair of Renault and chair of Mitsubishi. In addition, he is CEO and chair of the alliance between Nissan, Renault and Mitsubishi, which has its own head office and executive staff.
Renault owns 43% of Nissan, which owns 15% of Renault and 34% of Mitsubishi. The French government, which has a 15% stake in Renault, has asked the company to fire Ghosn.
News of the scandal sparked the biggest drop in the shares of the three companies since a scandal over emissions came to light in 2016.
The concern is this: without Ghosn, who is seen by many as the linchpin of the alliance, it will falter. He is said to have held the companies together, travelling at least a week every month to each headquarters, bridging cultural nuances and brand histories between the groups.
As with most scandals, the timing isn’t great. The auto landscape is being upended by electric and self-driving cars, with legacy companies investing billions as new players such as Uber and Tesla elbow in on their patch.