If you’ve been well-updated on the automobile industry, you’ve probably heard of a certain Carlos Ghosn, and the pandemonium surrounding him. In recent times, the issue has escalated, with news being made everyday, providing twists in the tale. If you’ve been out of the loop, don’t worry, we’re here to get you up to speed.
Who is Carlos Ghosn?
Carlos Ghosn used to be part of Nissan Motors’ bureaucracy and upper management. He was the Co-Chairman of the company and a very successful one at that. However, he faced charges of grave financial misconduct and a lack of official document compensation, after a probe.
The Lebanese Co-Chairman refuted these charges, terming them as ‘baseless’. He was arrested in Japan in November 2018 and has been in custody awaiting trial, up until his escape at the end of 2019.
How did he escape?
While the specifics of this are unclear, it does seem to be a carefully orchestrated jailbreak plan. Ghosn chose the busy time of New Year’s, when security is known to be lax, and got out of the country and went home to Lebanon by private jet. Considering that extradition policy between Lebanon and Japan does not exist and that Ghosn has ties with politicians back home, it definitely seems carefully planned.
Interpol has issued a wanted notice for Ghosn, while the trial is set to proceed with Nissan being charged instead. The wanted notice is no arrest warrant, so it’s safe to say that Ghosn isn’t coming back to Japan. For now, at least.
What are the charges, exactly?
Primarily, the charges deal with Ghosn’s negligence for official document compensation. Upon closer investigation by his company Nissan, they found cases of breach of trust, especially with unaccounted cash flow to Ghosn’s personal sources. Combining all the counts, if Ghosn is convicted, he could face 15 years in prison, which is pretty much a life-term.
What does Ghosn have to say?
In his first press appearance since the charges, Ghosn spoke out in Lebanon on how all the allegations against him are baseless, with no payments ever being decided on. He also maintains that the company money he used was for legitimate reasons. He says he was the victim of an “unjust legal system” in Japan. He also stated that his arrest was spurred on by people who opposed the merger between Nissan and Renault, which was helmed by him.
Given his stellar reputation as a Nissan key player, he has been instrumental in propelling the brand to great heights. This has garnered him some support, especially in Lebanon and Japan.
Where does this leave Nissan?
Nissan has taken a huge hit due to Ghosn’s 13 months of incarceration. They took Renault down with them as well, plummeting by 28% and 23% respectively on the Bloomberg Auto Index for 2019. Under Ghosn’s managerial acumen, Nissan was booming and hitting all the right notes, performance-wise. In view of these events, both companies are busy doing damage control, trying to rally themselves to fill the power vacuum, mend their reputation and steer the merger back on track, Ghosn or no Ghosn.
This is a truly dynamic story, with a twist in the tale cropping up everyday. Let’s watch in the coming days as to how Nissan (and Ghosn) come out of this conundrum.7