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The downfall of Nissan’s Carlos Ghosn: An insider’s view

By Theo Leggett

Business correspondent, BBC News

image sourceReuters

image captionThe downfall of Carlos Ghosn made headlines around the world

It was a web of intrigue which led to the arrest and subsequent dramatic escape of one of the world’s best-known company bosses.

The spectacular downfall of the former Nissan chairman Carlos Ghosn in late 2018 made headlines on front pages around the world, as did his audacious escape from Japan more than a year later.

Throughout the affair, Ravinder Passi had a grandstand seat. As Nissan’s top global lawyer he was a witness to a corporate meltdown that he describes as “the lunatics taking over the asylum”.

At the time of Carlos Ghosn’s arrest, Mr Passi, a 45-year-old British lawyer, was working as Nissan’s global general counsel, leading a team of 250 people. He was asked to take part in the investigation into Mr Ghosn’s affairs.

He says now he has no idea whether or not the former chairman was guilty of the charges he faced in Japan. But he does paint a vivid picture of disharmony and dysfunction within Nissan itself.

image sourceGetty Images

image captionNissan’s headquarters: Ravinder Passi says his whistleblowing came at considerable personal cost

He claims his own efforts to blow the whistle on what he saw as wider wrongdoing within the company had serious personal consequences, leading to his demotion and eventual dismissal from Nissan, as well as a raid on his house by Japanese prosecutors and the end of an eight-year stay in the country.

In November 2018, senior executives at Nissan sprung a trap. They lured their jet-setting chairman and his closest associate Greg Kelly to Tokyo for an urgent, high level meeting.

When Mr Ghosn arrived at Tokyo’s Haneda airport, however, he soon found himself under arrest. He was charged with financial crimes, including failing to report his true earnings. Prosecutors were acting on information provided by Nissan itself, much of it collated by Mr Ghosn’s own chief of staff Hari Nada.

Mr Ghosn subsequently claimed he was the victim of a plot orchestrated by Mr Nada and the chief executive Hiroto Saikawa, alongside high-ranking government officials.

image sourceGetty Images

image captionMr Ghosn claimed his arrest was to derail a merger between Nissan and partner Renault

It was carried out, he said, to derail a planned merger between Nissan and its French partner company Renault, which they feared would give French shareholders too much influence over the Japanese carmaker.

That is a charge which Nissan and Mr Saikawa, who has since left the company, have repeatedly denied.

Ravinder Passi was one of a handful of people within Nissan who knew about the planned arrests beforehand. But even at this early stage, he says, he had deep misgivings about the process.

“I was called into Hari Nada’s office…and told there was going to be a dramatic arrest. Arranged for maximum publicity,” he explains.

“When you lie to someone, to get them back into a particular jurisdiction, so that you can have them arrested in a very public manner, that says a lot about what’s going on.”

image sourceGetty Images

image captionCarlos Ghosn was awaiting trial in Japan when he fled house arrest in Tokyo

Chief of staff Hari Nada, he says, had already reached a plea deal with prosecutors, providing them with information to use against Mr Ghosn, in return for immunity over his own involvement.

The deal was necessary because Mr Nada had himself been involved in drawing up the very financial arrangements which prosecutors claimed were illegal, and which had provided grounds for Mr Ghosn’s arrest.

For Mr Passi this was a serious problem: “The alarm bells were going off straight away. Anyone who is involved in the underlying activity is supposed to be excluded from the investigation – not put in charge of it.”

As the story unfolded, more unusual things began to happen. There were extensive leaks to the media which he says “cast Ghosn in a particular light and was in favour of Nissan”. This information, he claims, was coming directly from the CEO’s office, which Mr Nada was in charge of – and some of it was “highly classified”.

Other concerns emerged from the investigation itself – which implicated not only Mr Nada, but the CEO himself in serious conflicts of interest. These included the fact that Mr Saikawa had himself had signed documents relating to the very pay arrangements later said to be illegal, something which Mr Saikawa later admitted in court.

image sourceRavinder Passi

image captionRavinder Passi, his wife Sonia, and their four children were ordered to leave Japan within a matter of days

Uncovering these issues made Ravinder Passi worried for his own safety. Having witnessed the way in which – in his view – two foreign executives had been lured to Japan, arrested in a public manner and incarcerated, he was concerned about the treatment he himself would receive if he spoke out.

Nevertheless, unable by now to “defend the indefensible”, Mr Passi says he first wrote to the head of Nissan’s audit committee, then contacted the company’s independent directors.

No action was taken and instead there followed a period of what Mr Passi describes as “gaslighting” by the company. He was removed from the Ghosn investigation and relieved of most of his duties.

Feuding and bloodletting in the Nissan boardroom did not end with the arrest of Carlos Ghosn. Several foreign executives departed abruptly, including chief performance officer Jose Munoz, a key Ghosn ally. Then in September 2019, CEO Hiroto Saikawa himself was ousted – after admitting that he had been improperly overpaid.

But the changes at the top didn’t reduce the pressure on the would-be whistleblower. In May 2020 Ravinder Passi was ordered by Nissan to leave Japan in a matter of days. And as he prepared to leave, there was a raid on his house, carried out by Nissan staff and court officials, with police standing by.

media captionNissan staff and court officials raiding Ravinder Passi’s house

The raid, carried out in front of his wife Sonia and their four young girls, was to retrieve a laptop computer and phone belonging to the company. The computer, he says, contained evidence of “inappropriate and egregious” behaviour by Nissan executives.

Ravinder Passi is no longer employed by Nissan. He was removed from his high-ranking post in Japan last year, and sent to work in the UK. Having previously led a team of 250 people, he found himself working alongside just two others. He was fired not long afterwards – and has since taken Nissan to an employment tribunal, claiming unfair dismissal.

Nissan, which still employs Hari Nada, declined to answer a list of questions from the BBC regarding Mr Passi’s allegations, on the grounds that it does not comment on ongoing litigation.

The company has, however, stressed that its internal investigation into Carlos Ghosn was “robust and thorough”. It says “substantial and convincing” evidence was found which established that Mr Ghosn “intentionally committed serious misconduct and significant violations of corporate ethics”.

image sourceiStock

image captionNissan CEO Hiroto Saikawa was ousted in 2019 – after admitting he had been improperly overpaid

The carmaker has also pointed out that it has “strengthened its governance structure by making it more independent and transparent”, and has also strengthened its internal audit procedures.

Looking back, Ravinder Passi describes his experiences at Nissan as “kind of surreal”. And he says he still finds the whole affair puzzling.

After all, he points out, companies do dispose of senior executives on a regular basis. But rarely does that happen in the “contrived, theatrical” way that the company got rid of its one-time boardroom superstar, Carlos Ghosn.

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