Nis­san’s widens in­ves­ti­ga­tion into Ghosn

The Daily Star (Lebanon) - - FRONT PAGE - By Nori­hiko Shi­rouzu

BEI­JING: Nis­san Mo­tor Co. Ltd. has broad­ened its in­ves­ti­ga­tion into ousted chair­man Car­los Ghosn to in­clude deal­ings that took place in the United States, In­dia and Latin Amer­ica, three peo­ple with knowl­edge of the in­quiry said.

In one as­pect of their in­ter­nal probe, com­pany in­ves­ti­ga­tors are look­ing into de­ci­sions made in the United States by Jose Munoz who led Nis­san’s North Amer­i­can op­er­a­tions from 2014 to 2018, the peo­ple said. Munoz was re­cently placed on a leave of ab­sence due to the probe, they added.

Nis­san said this month that Munoz, its chief per­for­mance of­fi­cer and widely seen within the in­dus­try as close to Ghosn, was on leave “to al­low him to as­sist the com­pany by con­cen­trat­ing on spe­cial tasks aris­ing from re­cent events.”

Munoz is not co­op­er­at­ing with in­ves­ti­ga­tors, two of the peo­ple with knowl­edge of the probe said, both of whom de­scribed Munoz’ ac­tions as “stonewalling.”

One of the sources de­scribed Munoz, who cur­rently heads Nis­san’s China op­er­a­tions, as a “per­son of in­ter­est” in the probe, adding that it was not clear whether he would be ac­cused of any wrong­do­ing.

Munoz, 53, did not re­ply to Reuters re­quests for com­ment. The peo­ple with knowl­edge of the probe spoke to Reuters on con­di­tion of anonymity due to the sen­si­tiv­ity of the mat­ter. A lawyer for Ghosn, Mo­tonari Ot­suru, said in an emailed com­ment: “I am un­aware of this.”

Some of the ques­tions put to Munoz re­late to dealer fran­chise rights, one of the sources said.

Other ques­tions re­late to con­tracts with parts sup­pli­ers and ser­vice providers that Munoz ap­proved when he was at the helm of Nis­san’s U.S. op­er­a­tions, an­other source said.

The sources said the find­ings made as part of the probe into Ghosn’s af­fairs in the U.S. mar­ket are be­ing shared with prose­cu­tors. Tokyo prose­cu­tors de­clined to com­ment.

Nis­san has said that its in­ter­nal in­ves­ti­ga­tion had un­cov­ered “sub­stan­tial and con­vinc­ing ev­i­dence of mis­con­duct” by Ghosn and that its scope is ex­pand­ing.

Ghosn, once one the most cel­e­brated ex­ec­u­tives in the auto in­dus­try and the an­chor of Nis­san’s al­liance with France’s Re­nault SA, has been charged with un­der-re­port­ing his in­come. Fri­day, he was also charged with ag­gra­vated breach of trust, ac­cused of shift­ing per­sonal in­vest­ment losses worth 1.85 bil­lion yen ($17 mil­lion) to Nis­san.

In his first pub­lic ap­pear­ance since his Nov. 19 ar­rest, Ghosn de­clared his in­no­cence in court Tues­day, say­ing he had never re­ceived com­pen­sa­tion that was not dis­closed and that Nis­san had not suf­fered any losses due to a tem­po­rary trans­fer of a per­sonal for­eign ex­change con­tract.

The trans­fer had been a tem­po­rary mea­sure to pre­vent him from hav­ing to re­sign and use his re­tire­ment funds as col­lat­eral, Ghosn said.

Sources fa­mil­iar with the mat­ter have also said Nis­san in­ves­ti­ga­tors are ex­am­in­ing other dealer fran­chise de­ci­sions in sev­eral coun­tries where Ghosn played a part in the de­ci­sion-mak­ing to see if there had been any mis­con­duct.

In par­tic­u­lar, the au­tomaker’s in­ves­ti­ga­tors are look­ing into Ghosn’s role in what Nis­san in­sid­ers have de­scribed to Reuters as a sur­prise de­ci­sion in 2008 to pick a com­pany called Hover Au­to­mo­tive In­dia Pvt. Ltd. as Nis­san’s part­ner for mar­ket­ing, sales, after-sales ser­vice and dealer de­vel­op­ment in In­dia.

A dif­fer­ent firm, TVS, had been lined up for the role after much re­search by Nis­san man­age­ment in In­dia when Ghosn per­son­ally in­ter­vened at the last minute to push for HAI, four Nis­san in­sid­ers said.

They add that in 2012, HAI be­came the Nis­san’s ex­clu­sive na­tional sales firm in In­dia, de­spite be­ing rel­a­tively in­ex­pe­ri­enced in dis­tribut­ing ve­hi­cles to deal­ers.

Reuters was un­able to find a rep­re­sen­ta­tive for HAI, which ac­cord­ing to In­dia’s Reg­is­trar of Com­pa­nies was dis­solved as of Sept. 11, 2018. TVS did not re­spond to a re­quest for com­ment.

The probe is also look­ing at what ap­pear to be out­sized pay­ments for Ghosn’s body­guard ser­vices in Brazil, one of the sources said.

Ghosn’s lawyer Ot­suru did not re­spond to re­quests for com­ment on the ex­pan­sion of Nis­san’s probe into deal­ings in In­dia and Brazil.

A U.S. rep­re­sen­ta­tive for Ghosn de­clined to com­ment.

One source also said Nis­san is con­duct­ing au­dits of some distri­bu­tion part­ners in the Mid­dle East, in­clud­ing Saudi Ara­bia’s Al-Da­hana which owns half of a joint ven­ture called Nis­san Gulf with the other half held by a wholly owned unit of Nis­san Mo­tor.

Al-Da­hana, a mar­ket­ing and dealer de­vel­op­ment firm, is ma­jor­ity owned by Khaled Al-Juf­fali, vice chair­man of one of Saudi Ara­bia’s largest con­glom­er­ates.

Reuters has re­ported that Juf­fali is the per­son prose­cu­tors be­lieve ar­ranged a let­ter of credit for Ghosn over his for­eign ex­change con­tract after which a com­pany that Juf­fali owned re­ceived four pay­ments to­tal­ing $14.7 mil­lion.

Both Ghosn and the Khaled Juf­fali Com­pany have as­serted that the pay­ments were for le­git­i­mate busi­ness pur­poses.

Asked about the au­dit, a rep­re­sen­ta­tive for the Khaled Juf­fali Com­pany said the firm stood by its pre­vi­ous state­ment.

An­other Nis­san ex­ec­u­tive, Arun Ba­jaj, se­nior vice pres­i­dent for hu­man re­sources and who heads tal­ent de­vel­op­ment for Nis­san’s al­liance with Re­nault and Mit­subishi Mo­tors Corp., has also been put on a leave of ab­sence “to as­sist the com­pany by con­cen­trat­ing on spe­cial tasks aris­ing from re­cent events.”

Ba­jaj is be­ing ques­tioned and is co­op­er­at­ing with both Nis­san’s in­ter­nal in­ves­ti­ga­tors as well as prose­cu­tors, the sources said, adding that they ex­pect him to re­turn to work soon.

It was not im­me­di­ately clear what the ques­tions were about.

Ba­jaj did not re­spond to a Reuters re­quest for com­ment.

Ghosn is un­likely to be granted bail and is ex­pected to re­main in de­ten­tion through­out his trial as is often the case un­der Ja­pan’s crim­i­nal sys­tem, Ot­suru told re­porters this week. Ghosn’s trial may not be­gin for an­other six months, he added.

Sources say Munoz is “stonewalling” and not co­op­er­at­ing with in­ves­ti­ga­tors.

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