Today – Friday, November 19 – marks the third anniversary of Carlos Ghosn’s ouster from management at Nissan – and the revelations keep coming about the corporate-government cabal that was pulling the strings.
Ghosn’s shocking arrest at Tokyo’s Haneda Airport, after he had flown there thinking he was about to chair a meeting of the board of directors, set off a chain reaction of events that have had far-reaching consequences – and not only for him personally.
Nissan and its Alliance partners, Renault and Mitsubishi Motors, all have suffered massive business losses and even today, three years later, have not seen their share prices recover. On average, share prices are still 40% below where they were on the day of Ghosn’s 2019 arrest.
A less well-known part of the story is that Friday marks the third anniversary of a huge change in the structure of the Nissan, Renault and Mitsubishi partnership. With Ghosn removed, Nissan’s board was going to have to fill his spot anyway, but what transpired was more fundamental in terms of changing the governance structure of Nissan.
Despite holding a 43% stake in the Japanese automaker, Renault now effectively has no say in Nissan management and only collaborates with its Japanese partner through an Alliance “operating board” set up after Ghosn’s removal.
But others have stepped forward to share their insider accounts as well as documents to support his claims. We expect more to be made available over time.
Ghosn’s own words make the most compelling case for his innocence, not just non-guilt, and that the case against him was, as he’s always claimed, a “coup” by nationalists inside Nissan and Japan to take back Nissan from its largest shareholder, Renault.
The anniversary is an appropriate occasion to sum up the reporting we’ve previously published based on documentary evidence we had obtained, to pass along some new details previously unavailable in the international news media and to relate some important information Ghosn has included in a recently published book and/or conveyed to us in a recent, third interview.
That interview was keyed to the publication of the English edition of his tell-all book, Broken Alliances: Inside the Rise and Fall of a Global Automotive Empire. An earlier edition (Le Temps de la Verité, or Time for the Truth) was published in French last November and the Japanese edition will be released in December.
In collaboration with French journalist Philippe Riès, Hall of Fame auto executive Ghosn, who saved Nissan 20 years ago, shared with the public for the first time in his own words details about his arrest and incarceration and about the coup to remove him from management – including naming six of the conspirators (he now believes there were seven) who plotted for more than half a year in secret – and the disastrous consequences for Nissan and the Alliance.
“People are confused about the story,” said Ghosn, now 67 and looking fit and relaxed in our Zoom interview. “Why this happened, who’s winning? Why all this destruction? This is the most puzzling part. Anyone looking at the story asks ‘Who wins?’ And when they don’t find a winner, they say that whoever planned this is really stupid.”
Ghosn and Riès devoted an entire chapter on the whys (titled “Why?”) – the chapter that Ghosn considers to be the most important.
“The only people who seem to have won something,” Ghosn declared, “are the old boys, the Nissan old boys, the prosecutors, and the nationalists in the Japanese government because somehow they extracted Nissan from de facto control of Renault.” (The latest revelations concerning the Renault subterfuge are below.)
Our reporting indicates that the three biggest winners are:
- Two outside directors, Masakazu Toyoda and Motoo Nagai, neither of whom has any discernable experience in auto industry management although they are now running two of the three statutory committees set up supposedly to improve governance after Ghosn’s departure; and
- Hari Nada, one of Ghosn’s main accusers – who pled guilty to committing a serious crime, the equivalent of a felony in the United States, yet received a promotion.
Toyoda chairs the board nomination committee; Nagai, the audit committee. Both, along with Nada and at least four others in management, were members of the secret faction to remove Ghosn from management and criminalize accusations against him, bypassing the board.
It is not a new refrain for Ghosn to air his grievances – which are legitimate, since his due process rights were violated. He detailed his horrific treatment and legal rights violations in the second and third chapters of the book, titled Frozen Hell in Kosuge and Moscow Trial Made in Japan.
Note separately that Ghosn’s 109 consecutive days spent in solitary confinement before being granted bail in a tiny unheated cell at the Tokyo Detention House during the dead of winter arguably would qualify as torture under the United Nations torture convention.
He was rearrested and placed back in solitary for another 21 days when he tried to speak to the press. But new evidence – some of it revealed in the Tokyo trial of Greg Kelly, a former Nissan executive from Tennessee who appears to have been falsely accused – supports Ghosn’s claim of foul play.
We have seen documents, for instance, that show how Nissan’s chief of security, Rui Kamei, had hired a team of investigators to track not only Ghosn’s movements around Tokyo, but also the movements of his children, select journalists and senior Renault management – including the French automaker’s chairman, Jean-Dominique Senard, while Senard was on an important visit to Japan.
Kamei is the same individual who removed the draft report of the nearly year-long investigation into Ghosn’s compensation from Christina Murray’s office after she was stripped of her duties and prevented from delivering her report to the audit committee and board.
Murray headed the investigation. After her removal, according to one of our sources, the version of the report that was delivered to the board at its September 9, 2019, meeting selectively omitted key findings that were exculpatory in nature for both Ghosn and Kelly.
(Kelly is awaiting his verdict at his trial in Tokyo, closing arguments having been completed in October. Ghosn was never tried because he famously fled Japan in a daring year-end escape in 2019 and, consequently, his trial never got underway.)
Ghosn believed he was being followed by the police at the behest of the Tokyo prosecutors’ office. Maybe. But we now know that Nissan’s CEO office was conducting a surveillance operation of its own.
The biggest revelation so far is that Hiroto Saikawa, the automaker’s CEO at the time of Ghosn’s arrest, signed four proposals – two in 2011 and one each in 2013 and 2015, the latter two jointly with Kelly – to create a job for Ghosn after his retirement from Nissan management.
The first two charges against Ghosn and both charges against Kelly are that they tried to conceal eight years of past income for Ghosn from Japanese regulators and pay him upon retirement.
But the 2015 agreement in particular, which was drawn up by Nada with the assistance of a lawyer from the US law firm Latham & Watkins, which was advising Nissan, reveals the opposite – that Ghosn would be paid for a commitment not to work for a competitor in the future.
The previous 2013 agreement, which was prepared by another Latham lawyer, included both a “noncompete” provision and a proposal for Ghosn to work for Nissan as a consultant.
We’ve confirmed the authenticity of both documents from multiple sources.
There is, further, evidence that Nada traveled to Paris in 2014 to meet with Ghosn’s lawyer to discuss future work for Nissan, post-retirement – and that Nada understood there was no way that Ghosn, who had taken a 50% pay cut in 2010, could be paid retroactively for lost income.
An internal Latham & Watkins memo is even more explicit. A team of Latham lawyers, including several from the firm’s Tokyo office, interviewed Nada during the pre-trial phase of both Ghosn’s and Kelly’s trials.
In Nada’s own words: “Fees had always been designed to compensate [Ghosn] for post-retirement services.” Then: “Kelly explained that reimbursing Ghosn was a ‘debt of gratitude’ or ‘moral obligation’ owed by Nissan for his services” – not ‘a legal obligation.’”
Under cross-examination, Nada claimed he didn’t remember what he had said, and one of the Latham lawyers, a New York-licensed attorney, claimed “privilege” in refusing to confirm Nada’s comments.
A former Nissan insider declared that the first two charges were fabrications and that Nissan and the prosecutors’ office lied to the court.
A newly acquired document
One document introduced at the Kelly trial is a November 18, 2018, email from Nada to Saikawa. Sent the day before Ghosn’s and Kelly’s arrests, this newly emerging evidence is the most damning yet to Ghosn’s accusers.
It supports Ghosn’s claims – claims discussed in great detail in his and Riès’s book – that his removal was nothing more than a corporate putsch by Nissan’s old guard to take back control of the automaker from Renault:
“Nissan’s position,” wrote Nada, “should be that Mr XXX’s wrongdoing and removal as CEO at Nissan represents a fundamental change in the alliance and a new governance for the alliance must be found.” (From the closing arguments made by Kelly’s lawyer in Japanese: 日産のポジション は、XXX氏の悪事と日産の代表取締役を離れたことは、アライアンスの状況に対 する根本的な変更であり、アライアンスの新たなガバナンスが見いだされなけれ ばならないというもの。)
Mr XXX, of course, is Ghosn. And again, this was the day before the November 19 sting in Japan – and, outside Japan, the warrantless raids on Ghosn residences in Amsterdam, Beirut and Rio de Janeiro, the latter two discussed in great detail in the book.
The raid on Ghosn’s Paris apartment failed because, Ghosn would recall later, “I changed the locks two weeks before by coincidence and had not given a key to the concierge. So they were not able to enter.”
Note that in March 2019, four months after Nada’s directive to the CEO (Saikawa) and 10 months after Nada’s commissioning of a report on scenarios for removing Ghosn from management (to be discussed in the next installment of an ongoing Asia Times series), the Alliance announced plans to establish an “operating board” for the three partners – Nissan, Renault and Mitsubishi Motors – with a stipulation that future decision-making would be “consensus-based.”
Commenting on “consensus-based” management, Ghosn scoffed during the interview, saying “you need to make choices, and choices mean that at a certain point you need to decide what you want to do or not to do.
You also need a vision of the industry and where it is going. Frankly, there is nothing serious being articulated by Nissan’s current management, and they’re retreating on all fronts.”
When asked about future lawsuits in light of new evidence that has been obtained, Ghosn declared: “We will, but we need more evidence. Collecting information, collecting documents and collecting witnesses are essential.”
As in the past, we reached out to Nissan for comment. Nissan continues to stand by its position, in the face of evidence to the contrary, that it “conducted a robust, thorough and appropriate investigation that uncovered serious misconduct by Carlos Ghosn and Greg Kelly, later corroborated by multiple government agencies, which conducted their own thorough, independent investigations.”
The company characterized information we shared with them, including former Nissan General Counsel Ravinder Passi’s “conflict of interest” memo, as “speculation.”
Veteran newsman Roger Schreffler is a former president of the Foreign Correspondents’ Club of Japan.