Ghosn case risks harming Japan’s stature on world stage
Picture this: one of the world’s most prominent businessmen steps off a plane in a foreign country and is immediately arrested and carted off to jail. His alleged crimes? Embezzlement on a grand scale and deliberately hiding the true scale of his mega-salary. Sound fair? I am of course speaking about Carlos Ghosn, the chairman and architect of the powerful global car alliance Renault-nissan-mitsubishi. If you thought the ousting of WPP’S Sir Martin Sorrell was extraordinary, the financial scandal engulfing Ghosn and the biggest carmaker on the planet makes that look like a minor skirmish.
Ghosn is a business titan with few equals. He was a “god” that other major international players struggled to get time with, one grandee told me this week. At Davos, he was the main attraction. People moved aside when he strode through the main congress hall.
The Brazilian may well have committed the crimes he is accused of and, if found guilty, he should feel the full force of the law. Yet, there is something deeply troubling about his treatment since Japanese prosecutors pounced at a Tokyo airport last week.
Firstly, despite a month-long internal investigation by Nissan, Ghosn knew nothing about the charges until he stepped off his private jet. He hasn’t been allowed to speak publicly, yet his accusers have trashed his name and legacy in public. Then, just days later Nissan’s board voted unanimously to oust Ghosn as chairman, despite no formal charges against him.
Some commentators have hailed Ghosn’s downfall as evidence that big business is finally being held to account in a country that has for decades been deferential to large corporations and their leaders.
Nonsense. This is a an elaborate power grab orchestrated by Nissan with the full backing of the Japanese state. Nissan has long been frustrated by the imbalance in the arrangement. Although it is the much larger company, the French have 43pc of Nissan’s shares and voting rights, compared with the Japanese group’s 15pc non-voting stake in Renault. Not only that, but Nissan has been performing more strongly.
Ghosn, however, was planning to strengthen ties further through a merger, a move that would have been strongly opposed by the Japanese carmaker’s board, reports claim. It is telling that Nissan acted alone and Renault is holding firm, refusing to oust Ghosn. The Japanese needed him gone to prevent further loss of control of an important national asset.
For further evidence that Ghosn is the victim of a witch hunt, consider the outcome of some of Japan’s recent big corporate scandals: a billion dollar accounting fraud at Toshiba but no indictments; not a single arrest at car parts manufacturer Takat, which fitted tens of millions of vehicles with killer airbags; and a case against the executives of Tokyo Electric Power accused of criminal negligence over the nuclear meltdown at Fukishima that was twice dropped.
Ghosn’s heavy-handed treatment risks damaging, rather than enhancing, Japan’s standing on the global stage. Meanwhile, without the Brazilian’s guiding hand, the future of the Renault-nissan-mitsubishi alliance looks precarious.
‘This is an elaborate power grab orchestrated by Nissan with ... state backing’
Persimmon’s dilemma over boss
In the unlikely event that Roger Devlin, the new chairman of millionaire factory-comehousebuilder Persimmon, needed a reminder that high pay remains a red-hot topic, he was provided with one this week.
The revelation that Denise Coates, the founder and major shareholder of online gambling company Bet365, had paid herself £265m, was front page news everywhere.
It will have focused Devlin’s mind as he prepares to choose a successor to Jeff Fairburn, who must now work out how to spend a £75m bonus while keeping the lowest of profiles in his spendthrift home county of Yorkshire.
The firm favourite to replace Persimmon’s best paid executive is its second-best paid, Dave Jenkinson, who is currently standing-in while a formal search takes place for a new boss. Jenkinson made £41m from the now infamous share bonus scheme, though handed £3m of it back as part of the company’s attempts to quell the backlash.
Insiders say Jenkinson is more than capable of leading the housebuilder but, as one of the old guard, the pay row will haunt it when it is desperately trying to move on.
Yet, there is genuine anger among the Persimmon faithful that Fairburn was ousted. Overlooking his natural successor could spark a full-scale rebellion, putting an outsider on the back foot from the start. Devlin is between Scylla and Charybdis.
Thin-skinned adopt Trump tactic
One week, two cases of high-profile company bosses blaming the media for their woes. First Babcock’s boss Archie Bethel complained about the publicity granted to Boatman Capital, the shadowy research firm that accused it of burying bad news. Then Mothercare’s chief Mark Newton-jones whined that reports of the chain’s endless troubles had caused further damage.
Call it the Donald Trump effect: deflecting attention from your own shortcomings and failures by attacking the press for doing its job.
It is a deeply worrying trend. Bosses of public companies may not like the scrutiny, but it’s part of the job that they are paid handsomely for. They should be capable of responding rationally to questions about their stewardship without shifting the blame.