Nissan CEO says Tokyo court Carlos Ghosn had too much power

TOKYO – Nissan CEO Makoto Uchida told JapanThe court on Wednesday said former company president Carlos Ghosn had too much power, did not listen to others and remained in office for too long.

Uchida said on Wednesday that these were the factors that led to the charges of financially breaking the law for Ghosn. He testified as a witness for Nissan Motor Co., which is on trial as a legal entity on charges of falsifying securities reports, underestimating Ghosn’s compensation. He does not dispute the charges.

Greg Kelly, a former U.S. executive vice president of Nissan, is also on trial on charges of failing to fully report Ghosn’s damages. Both he and Ghosn firmly claimed innocence.

Ghosn was arrested in 2018 but fled to Lebanon while on bail. Lebanon does not have an extradition agreement with Japan.

“I felt ashamed and miserable when I found out something like this was happening unheard of,” Uchida told the Tokyo District Court about the charges against Ghosn and Nissan.

“The Nissan brand has been tarnished, workers have been demoralized, and trust in management has been lost,” he said.

Uchida said there was an atmosphere of fear in the company, and staff believed that provoking Ghosn posed serious risks.

Ghosna was sent to Nissan by French allied partner Renault about two decades ago, helping to revive the company on the verge of bankruptcy. Around 2014, it became less cooperative and the company began to chase sales volumes by setting over-ambitious targets, Uchida said.

The accusation that Ghosn stayed at the helm of Nissan for too long contradicts Kelly’s insistence that the company was trying to find legal ways to pay Ghosn and prevent him from going to a rival carmaker. Ghosn made a big pay cut when it became necessary in Japan in 2010 to announce high executive salaries.

Uchida became CEO and President in 2019. He worked for the large Japanese trading company Nissho Iwai Corp., before joining Nissan in 2003, when Nissho Iwai merged with another trading company, Nichimen, which later became Sojitz Corp.

Uchida’s predecessor, Hiroto Saikawa, resigned after he became embroiled in his own scandal, also linked to unreported compensation. Saikawa is not charged.

Nissan has promised to strengthen its corporate governance and audits to prevent the recurrence of any financial breaches.

Ghosn accused Nissan’s other top executives of forging plans to force him to leave the company for fear it could push Renault, which owns 43% of Nissan, to gain more control over the Japanese carmaker.

Nissan executives testified at trial that this was a concern.

The alliance of Renault, Nissan and smaller carmaker Mitsubishi Motor Corp. shares technology, auto parts and manufacturing facilities. According to industry experts, Nissan and Renault are almost inseparable.

It is unclear when a panel of three judges will reach a verdict at trial. This could take months. The maximum sentence Kelly could face is 15 years in prison.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama