By on June 15, 2020

Carlos Ghosn’s claim that he was the target of an industrial coup is looking a lot more valid this week after emails surfaced showing a high degree of internal organization regarding his ousting and subsequent criminal charges. The former head of the Renault-Nissan-Mitsubishi Alliance was infamous for wanting further integration within the pact. In fact, his aim was to make sure the tie-up became “irreversible.”

That idea never quite landed for Nissan leadership and Japanese shareholders, with many already holding the view that the alliance had already given French interests too much authority.

Emails dating back nearly one year before Ghosn’s November 2018 arrest clearly indicate top-level management at Nissan had a strong aversion to deepening ties with Renault. While understandable to a large degree, it’s counter to the claim that his removal was strictly about under-reported income and other financial malfeasance that were of particular interest to Tokyo prosecutors. At the very least, some actors at Nissan wanted to make sure the alliance patriarch suffered a massive loss of face while confronting allegations. 

Nissan was interested in removing Ghosn from power for some time. According to Bloomberg, digital documents and interviews with people in the know seems to indicate there was a plan to have Ghosn removed long before any action was taken. While that doesn’t necessarily absolve him from any criminal wrongdoing, it does lend weight to claims that some of the items he was being accused of were sanctioned by Nissan. It also makes his insistence that the whole thing was a setup seem downright probable.

From Bloomberg:

A chain of email correspondence dating back to February 2018, corroborated by people who asked not to be identified discussing sensitive information, paints a picture of a methodical campaign to remove 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 seeks the extradition of Ghosn, 66, who fled to Lebanon in a daring escape last year.

Alarmed by Ghosn’s pledge in early 2018 to make the alliance between the companies irreversible, senior managers at the Japanese automaker discussed their concern at how the chairman of both Nissan and Renault was taking steps toward further convergence, according to people familiar with discussions at the time.

Hari Nada, who ran Nissan’s chief executive’s office and later struck a cooperation agreement with prosecutors to testify against Ghosn, seems to be ground zero. He emailed Hitoshi Kawaguchi, Nissan’s senior manager regarding government relations, in 2018 to suggest the company stop his initiatives “before it’s too late.”

Nada also told former CEO Hiroto Saikawa that Ghosn was becoming increasingly annoyed with Nissan’s waning performance and to exercise caution. Saikawa, who had close ties with Ghosn and was hand picked by him to run Nissan, was warned that the prospective merger placed the two at odds with each other at a difficult time. “He can create a major disruption and you may become a victim of it,” Nada wrote.

Nissan’s official take has been that it moved to take Ghosn down only after a whistleblower’s report (Nada’s) pegged him and his lawyer, Greg Kelly (who remains in Japanese custody), for financial crimes. It was also known that the alliance head was coming down pretty hard on Nissan leadership for the automaker’s lackluster performance, and that firings were in the planning stage. Ghosn was clearly poised to clean house, only to be arrested before getting the opportunity.

Days before Ghosn’s arrest, Nada sought to broaden the allegations against Ghosn, telling Saikawa that Nissan should push for more serious breach-of-trust charges, according to correspondence at the time and people familiar with the discussions. There was concern that the initial allegations of underreporting compensation would be harder 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 wrote, using Ghosn’s initials, as he had done several times in internal communications stretching back years.

When asked to comment for this story, Saikawa referred to his prior public statements rejecting the existence of a plot to oust Ghosn. “There was no effort to remove Renault’s influence” by removing Ghosn, Saikawa told reporters in January after the former chairman accused Nissan executives of conspiring against him during a news conference in Beirut. “There’s a huge difference between that and his crimes,” Saikawa said then.

Saikawa abandoned his post last year after he was likewise found to have been issued better pay than he was supposedly entitled to. Other executives, including Nada, were found to have similar financial oddities.

While internal investigations at the automaker found no “inappropriate involvement” regarding Nada’s behavior, the company did limit his duties last fall and did its utmost to usher him out of the spotlight. Nissan managed to argue for more of what it wanted in the confusion following Ghosn’s arrest, as well. It has not, however, managed to change its corporate voting structure. Renault can still exercise full voting rights and receives direct input from the French government — as it’s also a stakeholder.

Meanwhile, Nissan holds a paltry 15-percent stake in Renault and lacks the ability to vote using its shares entirely.

With that in mind, it’s obvious to see why the Japanese automaker developed some animosity toward its alliance partner. The Bloomberg article also highlights some genuinely underhanded action on Nissan’s part and lends additional credence to Ghosn’s claim that he’d never have gotten a fair trail in the country — which is supposedly why he escaped before it could take place. It also goes into great detail as to how Greg Kelly got roped into all this, plus the subsequent power struggle between the two automakers that ultimately ended in disaster for all parties involved. It’s a compelling read and offers a comprehensive take on the what was going on behind the scenes in Japan.

Weird, wild stuff.

 

[Image: Plamen Galabov/Shutterstock]

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20 Comments on “Report: Ghosn Actually Does Appear to Have Been Set Up...”


  • avatar
    hreardon

    Wouldn’t it have been a heck of a lot easier to just fire him and pay his golden parachute?

    • 0 avatar
      Scoutdude

      It is sounding more and more like this was personal, they didn’t just want him gone, it seems like they wanted to destroy his reputation and be able to utter the classic cliche’ “you’ll never work in the auto industry again”.

      • 0 avatar
        bullnuke

        The prevailing cultures of differing countries are often overlooked by folks in the US. My travels in various Asian countries while in the Navy brought home to me the vast differences and the need to abide by these differences during my frequent visits (i.e., When in Rome, Do as the Romans do.). When visiting Japan, I was aware that there are certain rules for Gai-Jin. If Carlos was aware of these rules, he obviously did not follow them. Shame on him – I have no sympathy for his plight as no outsider can ever (with the exception of General MacArthur who had ’em by the ‘nads) overcome Japanese culture.

  • avatar
    SCE to AUX

    Now I’m even more a fan of his Great Escape.

    • 0 avatar
      Lynchenstein

      This sounds like the plot to a John Grisham novel. I’m loving it.

      • 0 avatar
        Lorenzo

        Novel? This is looking like a blockbuster movie: head honcho plans mass executive firings as part of a takeover, and gets double-crossed by his intended victims.

        To avoid lawsuits, it’ll have to be fictional. The plum role of Ghosn could be a black actor to throw off the lawyers, and it’ll have to be a different industry.

        I’m thinking telecom, with maybe Laurence Fishburne in the title role of flashy CEO trying to engineer a merger-takeover, and being trapped by the executives of the company he tries to take over.

  • avatar
    schmitt trigger

    Like a messy divorce, the gory and messy private secrets will surface for all the world to see.

  • avatar
    slavuta

    You can go to my original comments to the original posts about Ghosn. And I said this – this is all setup. Japanese “justice” system at its best – if you are arrested, you must admit, you’re the criminal. You think Japanese are just bunch of skinny, dolphin eaters?

  • avatar
    Carrera

    Well, Ghosn saved Nissan by cheapening it and its image. I am sure the Japanese never liked that but without him probably Nissan would have been dead by now. Nissan before the Renault merger was in no position to fend off Toyota, Honda and new new kids on the block Hyundai and Kia. I am afraid that in the end Ghosn just prolonged the inevitable.

    • 0 avatar
      Lorenzo

      I don’t think the Japanese Keiretsu system would have let Nissan die the way US companies are liquidated. It would probably have changed considerably, but Japanese companies don’t just disappear.

  • avatar
    Varezhka

    Basically, Nissan execs turned blind eye while Ghosn stole from the company but kept notes.
    Once he became too much of a liability for the company, the information was leaked to the appropriate authorities so that he can be removed.

    This is unfortunately part of a long running tradition at Nissan, happening every 20 years or so. The plot is quite similar each time, too. Nissan in crisis gets turned around by a strong leader, who over time becomes dictatorial and corrupt after a long reign. Nissan fortune wavers, and then the skeletons starts coming out. Yachts bought on company dime, salacious photos with prostitutes, etc. etc. The leader is jailed/ousted and it starts all over again.

    It was “emperor” Ishihara right before the Nissan bankruptcy, and “emperor” Shioji before that. It really have nothing to do with Ghosn being a foreigner, but more that he became too entrenched in the Nissan culture. Should have studied what happened to his predecessors at the company, and he would’ve thought twice about his Versailles wedding and Beiruit mansion.

  • avatar
    schmitt trigger

    Carrera actually brings a good point. Nissan was actually lucky that it was an European, and not a Chinese company who actually invested and acquired a majority stake in Nissan.

    It would have been a humiliation worse than when Jaguar Land Rover was acquired by a company from a former British Crown colony.

  • avatar
    IBx1

    This can only be surprising to hear if you have a room temperature IQ.

  • avatar
    conundrum

    The French government has EXACTLY the same 15% stake in Renault that Nissan does.

    https://www.bloomberg.com/news/articles/2017-11-02/france-cuts-stake-in-renault-to-15-in-1-4-billion-share-sale

    So Mr Posky, exactly how is Nissan’s share paltry, but the French government is some big looming monster? Ghosn had already flipped the government off on previous occasions for attempting to interfere beyond their paper influence. He let the politicians flap their gums as they are wont to do, and then did what he would have done anyway. What were they going to do about it? Nothing but moan and grumble at the lower levels, like senators griping about their state getting shafted on weapons plants in their district compare to those guys over there.

    So let’s dispense with the usual rhubarb that Americans tend to come up with when a government has some financial interest in a company, which is to reflexively call it socialism. President Macron is a neoliberal who has been busy privatizing France since before he became President. And there have been continual strong yellow-vest protests for well over a year against his high-handed putdown of working people, carefully not covered over here unless it gave people ideas. His privatizations where it made no sense except to make rich investors richer were what got him the presidency in the first place. It wasn’t street popularity for a dork on a mission for the elite. He got sold for a brief period by the establishment media, and then he was voted in as “king”, having essentially come out of bureaucratic nowhere. So much for French state intervention in Renault these days.

    The fact that Renault had 43% of Nissan stock but Nissan had only 15% of Renault goes back to 1999 when Nissan was essentially bankrupt, making lousy cheapened cars like the highly decontented Maxima from 1995 on. The company was a basket case. It got rescued and that was the best deal it could get out of the situation. Wiggling around afterwards and whining doesn’t get round the fact – you got bought, and you are owned. Same as in any other commercial venture. Too bad the fact doesn’t seem to have sunk into their self-exalted skulls. Or did they think like the lunatics at Microsoft who claim to still own the product they’ve sold to “customers”?

    That’s all water under the bridge. They were bought, and there was zero reason for Renault to give anything back afterwards. Nissan made a nice litle $500 million a year profit for them. Buffet would have approved.

    When Nissan’s Japanese management hypnotized themselves thoroughly into thinking they were in fact geniuses and that Ghosn was a flash in the pan, despite all evidence to the contrary, the plot to get rid of him began. They even lured he and Kelly under false pretences to a meeting in Japan. The plane landed and Ghosn and Kelly were arrested on those trumped-up charges. Japan finally exposed as a xenophobic nation who really cannot stomach anyone else, as the Koreans and Manchurians well know.

    There is no honor whatsoever at Nissan. Just a second-rate bunch of connivers.

    And to prove what a lame-arsed bunch of nobodies they are in management, look at what’s happened to Nissan sales since they got rid of Ghosn. Straight down the toilet.

    Doesn’t mean that Ghosn wasn’t double-dipping and buttering both sides of his bread or that he’s not a grasping greedy soul. But he had ten times the street smarts of that desk-bound bureaucratic management cabal, and knew it. So they came up with the plan to get rid of him by focusing on his misdeeds and then several of them got caught with their fingers in the till as well! Were they arrested and sent to a rock floor jail cell and given ramen to eat three times a day by their countrymen? Of course not. They were merely shuffled aside with much polite bowing, hanging their heads in mock shame.

    No honor at Nissan. And Mercedes showed that they had Ghosn’s measure by luring him into that engine contract-bilding at Smyrna for the first Mercedes four-cylinder turbo for Alabama-made C-Classes which they dropped after four years, and the shared factory at Aguascalientes Mexico to turn out the QX-30. So he’s not as smart as he thinks he is, either. Snookered by the Germans.

    • 0 avatar
      Varezhka

      The Nissan and the French government may have a same 15% stake, but one is a non-voting stake, while the other is a double-voting stake, so not nearly the same 15% stake. The French government also increased their stakes to 20% the same time they doubled its’ voting power. (Though now back to 15)

      Increasing the stakes and the voting power of the French government was a big part of Emmanuel Macron’s work as a Minister of Economy and Industry. It was also Macron that put the huge pressure on Renault to make a hostile takeover of Nissan, so no, hardly a disinterested third party in the case.

      I do agree Nissan has a terrible insular culture and think too greatly of themselves. They should’ve also known that after their 36.8% purchase in 1999, a hostile takeover was always on the table. But they were also right in being spooked by the sudden government intent to meddle with its parent company.

      Macron has always been a populist first and foremost, making bold sweeping changes without thinking through its full implications.

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