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June 15, 2020

Email Trail Points at How Nissan Orchestrated Carlos Ghosn's Ouster

A few days after the arrest of then Nissan Chairman Carlos Ghosn in 2018, reports surfaced that his public and humiliating treatment was part of a power play within the company. At the time, it was all anecdotal but now it seems there’s an email trail to back it up.

A Bloomberg report points to previously unreported internal email which had top Nissan executives planning to dethrone Ghosn as early as February 2018, almost a year before his arrest for financial misconduct.

The effort was motivated in part by opposition to the former chairman’s push for greater integration between the Japanese automaker and long-time alliance partner Renault.

At the center of those discussions was Hari Nada, who ran Nissan’s chief executive’s office and later struck a cooperation agreement with prosecutors to testify against Ghosn. Nada is a Malaysian-born lawyer who joined the automaker in the 1990s, and oversaw many of Ghosn’s affairs at Nissan.

Communication from Nada to then-CEO Saikawa and other senior executives showed deep concern about Ghosn’s plans to further integrate the alliance, which gives the French automaker greater control over Nissan.

Nada told Saikawa in April 2018 that Ghosn was becoming increasingly agitated about Nissan’s performance and comments by his handpicked successor, who said he saw “no merit” in a merger between Renault and Nissan.

Nissan should act to “neutralize his initiatives before it’s too late,” Nada wrote in mid-2018.

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. There was concern that the initial allegations of underreporting compensation would be harder to explain to the public.

The effort should be “supported by media campaign for insurance of destroying CG [Ghosn’s] reputation hard enough,” Nada wrote, using Ghosn’s initials, as he had done several times in internal communications stretching back years.

Then, the day of Ghosn’s arrest, Nada circulated a memo to Saikawa. Nada called for termination of the agreement governing the alliance and the restoration of the Japanese company’s right to buy shares in Renault, or even take it over. Nissan also would seek to abolish the French automaker’s right to nominate Nissan’s chief operating officer or other more senior positions.

Months after the arrests, Nissan was able to secure changes to its partnership with Renault, but the new agreement, forged in March 2019, didn’t alter the alliance as much as Nada had proposed. While Nissan won more say over executive appointments and eliminated Ghosn’s former post of alliance chairman, the shareholding structure remained intact.

Later that year, Nissan withheld its endorsement for Renault’s pursuit of a 50-50 merger with Fiat Chrysler. Saikawa has since stepped down as CEO in September 2019 after a Nissan investigation found he had been paid excess compensation. Nada, as well as other executives, also were overpaid, an internal probe found last year.

After Saikawa left, a new triumvirate was put in place to run Nissan, only to see one member, co-COO Jun Seki, resign soon after he lost out on the top job. CEO Makoto Uchida and COO Ashwani Gupta are now left to face the monumental task of turning around the automaker, even as the global economy sputters.

A year and a half after Ghosn’s downfall, many of the key players remain in limbo. Nada is still at Nissan, but was reassigned to a smaller portfolio. Saikawa left the automaker’s board in February and no longer has any formal ties to the company. Former Representative Director Greg Kelly, who lives in an apartment in Tokyo, is still waiting for his trial to start.

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