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Carlos Ghosn sues Nissan, connected individuals over his 2018 ouster

The arrest of Ghosn, 69, sent shockwaves through the global auto industry and unleashed turmoil within Nissan that continues to this day

Carlos Ghosn

Photo: Bloomberg

Bloomberg
By Reed Stevenson
 
Carlos Ghosn, the former head of Nissan Motor Co., sued the Japanese automaker and connected individuals for ousting him in 2018 and arranging his arrest for alleged financial misconduct, claiming more than $1 billion for “deep damage” to his finances and reputation.
 
The former auto executive, who forged Nissan’s carmaking alliance with Renault SA and Mitsubishi Motors Corp., filed his claims with the public prosecutor in the Court of Cassation in Lebanon, where he has lived since his dramatic escape from Japan in late 2019 to flee trial. The lawsuit, seen by Bloomberg News, was submitted on May 18 and translated into English from Arabic.

The arrest of Ghosn, 69, sent shockwaves through the global auto industry and unleashed turmoil within Nissan that continues to this day. Ghosn has minced few words criticizing Nissan and Japan’s legal authorities for removing him from the world’s biggest automaking alliance. He still faces criminal charges in Japan for what prosecutors describe as a plot to underreport his compensation, as well as a civil lawsuit filed by Nissan in a court in Yokohama seeking monetary damages.

“The serious and sensitive accusations” against me “will linger in people’s minds for years,” Ghosn asserted in the lawsuit, saying he “will suffer from them for the remainder of his life, as they have persistent and lingering impacts, even if based on mere suspicion.”

The lawsuit claims $588 million in lost compensation and costs, as well as $500 million in punitive measures. Nissan’s shareholders also suffered losses after the company squandered its first-mover advantage with respect to electric vehicles. Ghosn is no longer a shareholder in the Japanese company.

Ghosn was sent by Renault in 1999 to turn around the Japanese carmaker, which had been struggling before receiving a cash injection from the French company. He later became chief executive officer of both companies and chairman of the alliance. 

The lawsuit also makes claims against at least a dozen people, including: 

- Hari Nada, a Nissan employee seen as one of the key instigators of the plot to oust Ghosn
 
- Hidetoshi Imazu and Hitoshi Kawaguchi, two senior Nissan managers with early involvement in Nissan’s actions against Ghosn
 
- Toshiaki Onuma, a manager in the CEO’s office, who along with Nada, agreed to cooperate with Japanese prosecutors to avoid prosecution
 
- Masakazu Toyoda and Motoo Nagai, two Nissan board members

A representative for Nissan said the company hasn’t yet received the lawsuit or is aware of it, and therefore can’t comment or make anyone available for comment on Ghosn’s claims.

The lawsuit includes other individuals and entities, which have not yet been served, according to Ghosn’s legal representative. Lebanon’s public prosecutor has set a hearing for September. Authorities in Lebanon can request cooperation from their Japanese counterparts to investigate Ghosn’s assertions.

It’s not clear whether Japan’s judicial system, which Ghosn has said is “rigged” and “violates the most basic principles of humanity,” would be willing to cooperate with authorities in Lebanon, which doesn’t extradite its citizens.

In 2020, a UN panel found that Ghosn’s detention in a Japanese jail for more than 100 days was neither necessary nor reasonable and violated his rights. The decision to arrest Ghosn four times in a row so as to extend his detention was “fundamentally unfair,” according to the United Nations Human Rights Council’s Working Group on Arbitrary Detention.

The 18-page claim includes Ghosn’s plan to bring Nissan, Renault and Mitsubishi Motors under a grand alliance with Fiat Chrysler, which he says fueled concerns within Nissan in early 2018 that he was seeking to make the partnership irreversible. Nada and others then laid the groundwork to have Ghosn arrested in order to remove him from Nissan and the alliance, according to the former auto executive.

Ghosn also described his intentions for taking a voluntary pay cut in 2011 after new disclosure rules in Japan triggered efforts to find legal means to retain and pay him during retirement. Those plans eventually became the basis for the arrest of Ghosn and Greg Kelly, a former Nissan director who was involved in the salary discussions. A trial verdict last year exonerated Kelly of most charges and imposed a fine on Nissan.

The former auto executive described how he received job offers by Volkswagen AG, Ford Motor Co. and a more lucrative salary to join General Motors Co., but decided to stay with the alliance following the 2008-2009 global financial crisis. Ghosn said the efforts within Nissan to find ways to compensate and keep him were criminalized because that was the only “means found by the conspirators to get rid of him as the chairman of the board of directors.”

Nada and others then waged a “defamation campaign to tarnish his image,” Ghosn asserts in the lawsuit. The claim also details the involvement of the Japanese and French governments, the purge of certain people from Nissan following Ghosn’s arrest, issues with the company’s internal investigation into the matter and damage done to shareholders as a result of the actions.

In a way, the lawsuit is the crystallization of Ghosn’s efforts to clear his name following his arrival in Lebanon, where in early 2020 he held an epic news conference denouncing his arrest. The former auto executive spent part of his childhood in the country and lives in a house that was bought and restored by Nissan, which he had planned to buy from the company upon retirement.

“They cannot plot a lie and cheat and get away with it,” Ghosn said by telephone from Beirut. “This is just a small response to the damage they created. I don’t think they can right the wrong, because the damage is so deep — this is intended to repair part of the damage that has been done.”

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First Published: Jun 20 2023 | 1:47 PM IST

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