Friday, May 14, 2021

Carlos Ghosn’s reign detailed and dissected in Tokyo courtroom

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In January 2018, the head of a Nissan business unit that handled travel bookings for senior executives approached the company’s internal auditor with an issue involving first-class airline tickets and an astonishing discount request. .

Carlos ghosn could not have known, but the first domino had just fallen on one of the most famous careers in the business world. Ten months after the discovery of the ticket problem, the former president of Nissan would be arrested at Haneda airport in Tokyo, jailed, questioned and stripped of his titles in the world’s largest automotive alliance. Mr Ghosn would later be charged with financial misconduct before arranging a dramatic escape from Tokyo in a club and living under an international arrest warrant in Beirut.

The biggest unanswered questions and conspiracy theories over the next two years have centered on the sequence of undercover investigations and whistleblowing that sparked his fall.

Mr Ghosn escaped Japanese court but five months after the trial of Greg Kelly, his former deputy, the answers have finally started to emerge. Mr Kelly, a US lawyer who has maintained his innocence, is accused of participating in an alleged scheme to cover up Mr Ghosn’s pay scale. Looking more and more exhausted, he sat in court a few meters from his colleagues with whom he had worked closely for years. Two of Mr. Kelly’s former peers gave testimony about to cry.

But over the past two weeks, the most surprising revelations have come from the testimony of Your day, the former Anglo-Malaysian chief legal officer at Nissan, whose cooperation with prosecutors in exchange for immunity was essential to the arrest and prosecution of Mr Kelly and his former boss. He gave a glimpse into Nissan’s inner sanctum and the paranoid, fractional halo that surrounded Mr. Ghosn.

Carlos Ghosn is the central figure in the trial of Greg Kelly, his former deputy, who allegedly plotted to hide Mr. Ghosn’s pay scale © JIJI PRESS / AFP / Getty

The most explosive testimony came from Hari Nada, the former Nissan chief legal officer, who became a whistleblower.

“No matter what harm or consequences the company would face by reporting it, I believed the priority was to prevent these things from happening,” Mr. Nada told the court, adding that the Japanese company would hold the company morally responsible for the fault of its Former boss.

According to Mr Nada, Mr Ghosn had discovered that the first-class tickets he had booked for his globetrotting family through the Nissan travel unit could be purchased for less online. He demanded that the business unit reimburse him – the highest-paid executive in Japan at the time – the difference in cash.

The alert, which was the subject of a secret investigation by Hidetoshi Imazu, Nissan’s auditor at the time, suggested that concerns about Mr. Ghosn’s behavior existed not only at a company where he was all- powerful, but that they could finally appear.

“I thought Mr. Imazu was brave to be ready to face Mr. Ghosn,” Mr. Nada said.

What he didn’t know was that Mr. Imazu would later take the findings to Tokyo prosecutors before presenting them to Mr. Ghosn and counsel.

Mr Nada said he was already deeply concerned that Mr Ghosn, who was 63 at the time, was on the verge of retirement and had built elaborate mechanisms that would turn this change in status into a huge one. undisclosed financial windfall.

Michael and Peter Taylor are said to have helped Ghosn escape in 2019 and could be extradited from the US to Japan for trial © DHA / AP

Greg Kelly’s wife Dee, pictured in Tokyo last year, said her husband was holding up well despite the length of the trial © Behrouz Mehri / AFP / Getty

These mechanisms, he added, were the culmination of years of meticulous planning and growing tensions between Mr. Ghosn’s lieutenants and Nissan executives. These were motivated by fears that revelations of his full salary under new disclosure rules in 2010 would force him to fire Nissan’s largest shareholder, Renault.

Mr Ghosn, who was presented in court as “a dictator”, ordered his subordinates to find ways to ensure that he would receive nearly $ 90 million in deferred compensation when he retired in as president of Nissan. Possible solutions ranged from payments through subsidiaries in the Netherlands and Dubai, to consulting fees and a non-compete agreement, to some form of stock option meeting strict nondisclosure conditions. of Mr. Ghosn, according to court testimony.

Those involved in building the plans portrayed a toxic environment where employees were torn between concerns about managing Mr. Ghosn’s compensation and a desire to please a charismatic boss who had saved the company from virtual -bankruptcy in the late 1990s. A female witness said she wanted to leave the company after questioning Mr. Ghosn’s pay system, while another said he felt “trusted” when Mr. Ghosn shared confidential information with him.

To add to the complexity, the final hurdle in implementing the program was to avoid further scrutiny that would flow from Mr Ghosn’s other plan to fully merge Nissan with French partner Renault.

“I was convinced that Mr. Ghosn was going to retire” in June 2019, Mr. Nada said. “Following his retirement, to keep control of the companies, he would merge them. And I felt the train was about to leave the station and had to be stopped.

Mr Kelly’s trial, which focused on Mr Ghosn’s conduct and is expected to last at least until July, highlighted the absence of the former Nissan chairman of Japan and his judicial system . After his flight to Beirut, Mr Ghosn continued to deny the allegations against him, accusing senior executives and Nissan prosecutors of “plotting” his ouster.

His absence will likely become more glaring after a federal judge in Boston on Thursday rejected efforts by Michael and Peter Taylor – the father-and-son team that allegedly organized Mr Ghosn’s escape – to avoid extradition to Japan and a trial in Tokyo.

Mr Kelly’s wife Dee said her husband was holding up well despite the length of the trial. “We are 64 years old and we cannot reclaim our time,” she said, spending Christmas Eve at the courthouse.

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