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Nissan CEO promises turnaround for disgruntled shareholders

48 Comments
By YURI KAGEYAMA

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48 Comments
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Turn around and run behind the corrupt government prosecutors and Ministry of Trade, worked before why not now.

19 ( +20 / -1 )

I am betting those shareholders wouldn't mind Carlos taking over again!

21 ( +23 / -2 )

Won't happen. If Japanese companies published a P&L and a balance sheet based on truth, they would all be dissolved within a week.

19 ( +21 / -2 )

I used to really like Nissans, the GT-R, 300Z, etc. Now I would not take one even if they gave me one for free.

13 ( +15 / -2 )

Agreed, they used to produce quite good cars. It was great fun even to ‘take out’ Benz’s on German Autobahn with my already 110,000km and bought used Sunny Coupé. No repairs needed, not even the slightest oil loss, nothing to complain at all. Sometimes I added one of those little oil additive bottles, and then it was like new, accelerated efficiently and the next more expensive cars like Benz or Porsche were due….rofl But nowadays? I am sure, they threw away all expertise of car producing like all other companies too. They insist in dying or setting legions of jobs at risk with their electric toy cars that not only not drive but cannot even be produced if some IC supply chains are broken. Former cars didn’t have such crazy ‘ingredients’ , but were still drivable cars instead.

4 ( +5 / -1 )

Ghosen was never the source of their problems. With him gone and innovation with it, they'll bleed talent and staff until they go under.

The real problems for the entire world to see were the double standard of Saikawa who left under the same charges to Ghosen but who just stepped down, wasn't jailed. How easy it was to put your personal business rivals in jail. The whole prosecutor ambivalence to international standards with hostage justice ruined whatever reputation Japan had left

Foreign investment will think twice and not bother

So Nissan got its wish, no more investment.

12 ( +13 / -1 )

*Ghosn not Ghosen

1 ( +2 / -1 )

The whole Ghosn thing was a poorly executed assassination attempt from the getgo. Problem was that the target refused to die.

The guillotine dropped but the dude just got up and walked away. Jesus, who doesn't like that kind of imagery?

Shareholders should be peeved. The stock is at about half when Ghosn was initially arrested. Over two years ago now.

Management are clueless imo. Toxicity levels within Nissan must be highly elevated, particularly at the higher levels. Who do you trust?

12 ( +13 / -1 )

I will never buy a Nissan or Olympus product after what happened to their former CEOs.

14 ( +15 / -1 )

I am betting those shareholders wouldn't mind Carlos taking over again!

Actually, some shareholders say that Nissan will be better off if Ghosn is back.

9 ( +10 / -1 )

Its brand image was battered by the 2018 arrest of Ghosn over various financial misconduct allegations.

The battered image wasn't because of Ghosn's alleged financial misconduct. It was because Nissan backstabbed it's own President just because they want to keep Nissan "Japanese", whatever that means.

14 ( +15 / -1 )

Nissan corporate shot themselves in the foot with a BAZOOKA when they ousted Ghosn by way of boardroom coup. I still have a Nissan car(great vehicle, purchased before the coup), but any future purchase would NOT be a Nissan. Never.

8 ( +9 / -1 )

Now that they have purged the company of all foreign influence, Nissan will become the number one carmaker in the world!

-14 ( +1 / -15 )

5 out of 12 shareholders want Ghosn back.

I love the image of Ghosn's coming back.

It's gonna be epic!

5 ( +6 / -1 )

Now that they have purged the company of all foreign influence, Nissan will become the number one carmaker in the world!

Only in your dreams!

12 ( +13 / -1 )

They will bankrupt likely while Kelly is still being tried; And then, l will drag Renault with it.

If I am a shareholder I would sell everything while I still can.

6 ( +7 / -1 )

Company is going down the drain. They need Ghosn now more than ever, but they screwed up and now there is no way out...

6 ( +7 / -1 )

“Nissan officials have testified they turned to Japan’s criminal authorities to get Ghosn arrested because they feared the alliance was excessively dominated by Renault.”

I’m concerned about this statement, where is the criminality? What offence is suspected? Arrested for what?

I can’t see this happening in Australia as it would be more of a corporate/shareholder issue than a criminal complaint.

8 ( +9 / -1 )

where is the criminality? What offence is suspected? Arrested for what?

It is called rocking to oyaji boat!

It is not just Foreigners but any business leader that goes "foreign" or does not follow the Oyaji system.

Livedoor was one to get the same, I would not be surprised to see, SoftBank Son to be next after the things he has said.

8 ( +9 / -1 )

Much of the commentary on Ghosn’s case has relied on implicit or inapt comparisons and lazy caricatures. The impressions thereby created have been simplistic and misleading. Japanese criminal justice has many weaknesses, but if Ghosn’s case had occurred in the U.S., it is not obvious that he would have fared better, nor is it clear that the interests of justice would have been better served.

The factual allegations related to the “Oman Route” are the most damning allegations against Ghosn by Japanese prosecutors, since they clearly involve personal benefits to Ghosn and his family members from Nissan funds. Ghosn is alleged to have utilized the CEO reserve fund, to have Nissan Middle East make $35 million in payments to Suhail Bahwan Automobiles, a Nissan car dealer in Oman, during 2011-2018 (Kostov and McLain, 2019).

An executive of the car dealership apparently made payments (1.7 billion yen or 17 million dollars) in his personal capacity to an entity effectively controlled by Ghosn, which in turn made payments (560 million yen) to entities controlled by Ghosn’s wife and (partially) by his son. When Renault (with Nissan) eventually launched its own investigation of Ghosn’s activities, it apparently shared information on the Oman route with French prosecutors, who initiated their own criminal investigation in February 2020, focusing on the Oman route and 11 million euros in questionable expenses (for personal entertainment, gifts and legal fees, donations, use of jets, and housing) found by Renault (Associated Press, 2020; for details of the expense allegations see Nissan Motor Co., Ltd., 2020, pp. 9-10).

As for Ghosn’s success at Nissan in the early 2000s, it was not matched by achievements in the following decade, when Nissan’s performance and profitability were inconsistent (Boudette, 2020). His personal reputation took a hit in 2010 due to the high level (at least by Japanese standards) of his executive compensation. A new rule in 2010 required that total individual compensation for company executives must be disclosed if it exceeded 100 million yen (roughly one million US dollars, utilizing an approximate exchange rate of 100 yen per dollar) (Financial Services Agency, 2010). In anticipation of a strong negative reaction to the disclosure of Ghosn’s salary, Nissan cut Ghosn’s disclosed compensation in half, though he apparently expected to eventually be paid the “remaining” amount after his formal retirement from Nissan. These facts would later lead to the prosecution of Ghosn for the misleading disclosure of his compensation. 

Two major factors contributing to corporate governance weaknesses at Nissan were the presence of a controlling shareholder, Renault, and the long period – nearly 20 years – of executive control exercised by Ghosn. Neither of these factors is common in Japan or the U.S. (for overviews of corporate governance in Japan, see Aronson, Kozuka and Nottage, 2016; Aronson, 2019).

Renault and Ghosn continued to build up their global automobile alliance with the addition of Mitsubishi Motors in 2016. Nissan became the owner of 34% of the shares of Mitsubishi, and Ghosn became chairman of all three companies (Ma and Horie, 2016). However, business success continued to prove elusive. Profitability was down in the crucial North American market, and it once again seemed that Renault and Nissan were falling behind the international competition, at a time when significant new investments were required to be competitive in emerging markets for electric cars and self-driving automobiles. Ghosn formally resigned as president and CEO of Nissan in April 2017, but retained his title as chairman and apparently continued to function as de facto CEO.

One longstanding proposal favored by Renault to address these challenges was further integration of the alliance companies, which could have included a complete merger between Renault and Nissan. But this idea was opposed by executives at Nissan (Tanaka, 2018). Like the general public in Japan, they still viewed Nissan as an iconic Japanese car company. They chafed under the alliance’s failure to rebalance the share ownership structure between Nissan and Renault despite Nissan producing substantially larger sales and profits than Renault. 

In 2018, after Nissan received whistleblower reports alleging Ghosn’s misuse of company funds for personal purposes, the company began an internal investigation without notifying Ghosn (Nissan Motor Co. Ltd, 2020). Based on the results of this investigation, and fearing personal and corporate liability, two Nissan employees (Nada Hari and Onuma Toshiaki) went to prosecutors to offer their cooperation in return for immunity from prosecution under Japan’s new plea bargaining law, which was passed in 2018 (Jiji, 2019). Ghosn (and his aide Kelly) were then arrested when they arrived in Japan in November of that year to attend a board meeting. By April 2019, Ghosn would be indicted on four counts of financial wrongdoing—two for false information disclosures concerning his compensation, and two for the personal misuse of company funds.

-12 ( +1 / -13 )

 the “Oman Route” are the most damning allegations against Ghosn by Japanese prosecutors

The Oman Route is a dead end because his alleged accomplice denied the allegations.

Nissan cut Ghosn’s disclosed compensation in half

See the subject of the sentence: it is "Nissan", the responsable of the action.

The latter half of your post states the motive of Nissan for backstabbing Ghosn.

Very illuminating, thank you.

reports alleging Ghosn’s misuse of company funds for personal purposes

oh! that one is not a crime, but is very dirty. I hate him for doing that, Ghosn must repay whatever money he misused.

-1 ( +0 / -1 )

@Richard Gallagher

I am sure he broke several rules and laws, SO what?

Japan has put in place laws that make it near impossible for any major corporations to hire foreigners unless they leave that job before they reach 5 years in Japan.

The only thing Ghosn is guilty of is not being stupid and giving most of his worldwide earnings to the Japanese tax office.

6 ( +7 / -1 )

Empty promises. How are they going to get chips for their cars? The worldwide chip shortage is here for the medium long term.

3 ( +4 / -1 )

Another shareholder also addressed the Ghosn scandal, saying the problem should have been solved internally instead being handed over to prosecutors.

What a newbie! Get with the program buddy!

Nissan officials have testified they turned to Japan’s criminal authorities to get Ghosn arrested because they feared the alliance was excessively dominated by Renault.

See? How could they dispose of Ghosn by simply dealing with “the problem” internally?

The goal was to eliminate Ghosn, big time.

Nissan, Toshiba… there is massive risk in owning Japanese stocks, given the shenanigans that go on, all with a complicit government to screw over shareholders. Not to mention the biggest buyer being the central bank. No thanks.

4 ( +6 / -2 )

Nissan....hey hey GOOD BYE!!!!

3 ( +4 / -1 )

Haven't they been promising a turnaround since Ghosn cleverly escaped? Usual lip-service?

Anyway, they could start by cutting ties in Myanmar with the Junta. Might get a positive response.

3 ( +4 / -1 )

5 out of 12 shareholders want Ghosn back...

Even if 12 out of 12 shareholders want him back, well that will never happen, he will never come back to Japan under any scenario.

6 ( +6 / -0 )

Regardless of how much Japanese Nissan is angry, Renault still controls the whole alliance totally.

1 ( +2 / -1 )

By conspiring and removing Ghosn, Nissan killed their golden goose!

2 ( +3 / -1 )

antiquesaving:

I am betting those shareholders wouldn't mind Carlos taking over again!

No foreigner is going to touch any Japanese company with a barge pole, after this and Olympus. Nissan will have to sort out their own mess which was of their own making.

2 ( +3 / -1 )

What is new ???.

0 ( +1 / -1 )

5 out of 12 shareholders want Ghosn back...

It would be nice to know who these 5 anonymous shareholders are.

Ghosn back?

This will never be the case, nowhere and worldwide. Ghosn is barred from any executive job in any US-company by US regulators for the next coming 10 years, he is an international fugitive and in legal trouble not only because of Japan.

-4 ( +1 / -5 )

The same clown captains nearly sank Nissan before Ghosn saved the ship. Now these same jokers expect us to believe that they'll turn things around in the current age of Tesla, Rivian, Nio etc.?

6 ( +7 / -1 )

Manufacture supercars in Australia, which has a free trade agreement with the UK.

1 ( +1 / -0 )

I love the image of Ghosn's coming back.

I think he would probably tell them to stuff it.

3 ( +3 / -0 )

Nissan cut Ghosn’s disclosed compensation in half, though he apparently expected to eventually be paid the “remaining” amount after his formal retirement from Nissan. These facts would later lead to the prosecution of Ghosn for the misleading disclosure of his compensation. 

That is not illegal and it is not a failure of disclosure. If you are not yet paid it you do not declare it as income. You would declare it on taxes once paid, post retirement assuming your employer kept their word. No guarantees. No one is required to pay taxes on income one might get in some future year.

4 ( +4 / -0 )

Manufacture supercars in Australia, which has a free trade agreement with the UK.

I don't think Australians have the energy to complete in the global automobile market. All of the major manufacturers have closed their Australian operations. Nissan has three large plants in Mexico including one that is newly built.

1 ( +1 / -0 )

Mr Ghosn was so humble to trust Nissan's officials.

An apology to Mr Ghosn will help him and his family to recover their reputation

0 ( +1 / -1 )

Nissan's officials need to reconsider to get Mr Ghosn back by tripling his compensation.

An apology to him and his family

0 ( +1 / -1 )

Ghosn saved Nissan? Yeah, sure. Ha, ha, ha...

-5 ( +0 / -5 )

@Boku Dayo

Ghosn saved Nissan? Yeah, sure. Ha, ha, ha...

Nissan before Ghosn losing money left in right!

Nissan with Ghosn proftable!

Nissan after the collusion ruin Ghosn reputations because they were afraid that he work for another company and eventually merge with Renault-------horrible

Nissan does not need Ghosn? Yeah, sure. Ha, ha, ha...

1 ( +2 / -1 )

@Yohan

This will never be the case, nowhere and worldwide. Ghosn is barred from any executive job in any US-company by US regulators for the next coming 10 years, he is an international fugitive and in legal trouble not only because of Japan.

That was the plan. They did not want him to merge NISSAN with Renault, and they did not want him to work for a competitor.

Thus, the government collusion with the Japanese NISSAN executives!

2 ( +3 / -1 )

NISSAN also hopes that maybe Renault will sell their shares back to NISSAN or the J-Gov.

I say NISSAN totally ruins this for Renault and France if I were them I totally sell all my share to a Chinese company.

That would be the best payback ever!

1 ( +2 / -1 )

I say NISSAN totally ruins this for Renault and France if I were them I totally sell all my share to a Chinese company.

France is very hardcore on economic nationalism/socialism, so they will hold on to something very tightly once they got a hand on it. Hell, there is a chance that the French government will intervene to buy all remaining shares of Nissan and Mitsubishi Motors once those oyajis ruin the alliance so low, so cheap to buy everything much easier.

That would be the best payback ever!

I totally agree. The Chinese Communist Party will even exert political pressure on LDP elites to shimmer down. China is now the largest market for Japan, so the Keidanren and METI would not want to ruin it. Toyota becomes number one in China, and the CPC can easily kick Toyota out if they are angry.

0 ( +1 / -1 )

I hope Nissan rots,

0 ( +1 / -1 )

An apology to Mr Ghosn will help him and his family to recover their reputation

Dropping charges would be better.

-1 ( +0 / -1 )

Nissan's officials need to reconsider to get Mr Ghosn back by tripling his compensation

I could be wrong but something tells me no amount of money would make him want to go back to work for either Nissan or Renault.

-1 ( +0 / -1 )

Despite all the "wisdom" of the resident commentators here on JT, I could care less.

I've never owned a Nissan vehicle, nor I am planning to own one (Ghosn or no Ghosn).

LOL

-1 ( +0 / -1 )

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