Former Nissan CEO Carlos Ghosn always said he was set up and now there’s some evidence to support the businessman’s claim.
According to people knowledgeable with what happened and previously unreported internal correspondence, the campaign by top Nissan Motor executives to overthrow one of the most celebrated leaders in the automotive industry started nearly a year before Ghosn was arrested in November 2018 for alleged financial misconduct.
The effort was motivated in part by opposition to the businessman’s push for greater integration between Nissan and long-time alliance partner Renault SA, the new information indicates.
While Nissan has long maintained that the decision to oust Ghosn turned on accusations of underreporting his income and other financial transgressions leveled by Tokyo prosecutors, the documents and recollections of people knowledgeable with what transpired show that a powerful group of insiders observed his detention and prosecution as an opportunity to revamp the global automaker’s relationship with top shareholder Renault on terms more supportive towards Nissan.
A chain of email correspondence dating back to February 2018, corroborated by people who would like to remain unidentified discussing sensitive information, paints a picture of a methodical campaign to eliminate a powerful executive. The information comes to light as another former Nissan executive and the company itself face a looming trial in Tokyo, and as Japan looks forward towards the extradition of Ghosn, 66, who fled to Lebanon in a dramatic escape last year.
Alarmed by the former CEO’s pledge in early 2018 to make the alliance between the companies irreversible, senior managers at Nissan talked about their concern at how the chairman of both Nissan and Renault was taking steps toward more convergence, according to people knowledgeable with discussions at the time.
At the center of those conversations was Hari Nada, who ran Nissan’s chief executive’s office and later struck a cooperation agreement with prosecutors to testify against Ghosn. The automaker should act to “neutralize his initiatives before it’s too late,” Nada wrote in mid-2018 to Hitoshi Kawaguchi, a senior manager at Nissan responsible for government relations, the correspondence shows.
According to the Japan Times, Lavanya Wadgaonkar, a spokeswoman for Nissan, has refused to comment on this story. Nada didn’t reply to an email and voicemail seeking comment, while Kawaguchi, who left Nissan in December, refused to comment, as did the Tokyo Prosecutor’s Office and a representative for Renault.
Nada informed CEO Hiroto Saikawa in April 2018 that Ghosn was becoming increasingly agitated about the automaker’s performance and comments by his handpicked successor, who said he observed “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 to Saikawa. The following month, Nissan released a profit outlook well below analysts’ estimates.
A day prior to Ghosn’s arrest, Nada sought to broaden the accusations against Ghosn, telling Saikawa that the automaker should push for more serious breach-of-trust charges, according to correspondence at the time and people knowledgeable with the discussions. There was concern that the initial allegations of underreporting compensation would be more difficult to explain to the public, the people said.
The effort should be “supported by media campaign for insurance of destroying CG reputation hard enough,” Nada informed, using Ghosn’s initials, as he had done several times in internal communications stretching years ago.
A year and a half following Ghosn’s downfall, many of the major players remain in limbo. Nada remains at Nissan, but was reassigned to a smaller portfolio. Saikawa left the automaker’s board in February and no longer has any official ties to the company.
Then there’s Ghosn, who is residing in Beirut at a house purchased by Nissan, has pledged to restore his reputation and prove his innocence. Japan has stated that it will keep seeking to bring Ghosn to justice, but it lacks an extradition treaty with Lebanon and making it more unlikely for Ghosn to ever face a Japanese courtroom.