This 20 November 2018 video from Australia says about itself:
Carlos Ghosn Arrest: Nissan boss caught cooking the books | Auto Expert John Cadogan
And the glue that binds this tenuous three-way together is Alliance boss, 64 year old automotive impresario Carlos Ghosen. The Luke Skywalker of automotive alliances. The shitbox whisperer.
Unfortunately, it seems Mr Ghosn has departed to the Dark Side of the Force, having been caught with his fingers in the till, allegedly. The grim news broke this week, off the back of a protracted internal investigation by Nissan bigwigs, following a whistleblower dumping Mr Ghosn in it a few months back.
Big G has been arrested in Tokyo, turning himself in to Jap prosecutors following what Nissan described as (quote) “significant acts of misconduct”. It appears that Big G and another board member, Greg Kelly, have allegedly been under-reporting Big G’s income to the Tokyo Stock Exchange.
This is generally frowned upon. It’s a breach of listed company etiquette, and a crime, inconveniently, if true. They’ve come in about five billion Yen low on remuneration – that’s about $44 million US dollars or about 61 million Shitsvillian micro-pesos. It’s a serious fudge of the books, if true. So basically, what they’re alleging is that Big G actually took home about 10 billion Yen in payment, but only reported about half of that, over several years.
The maximum penalty for this kind of financial misrepresentation in the land of the rising sun is 10 years in the big house with the Nipponese equivalent of Bubba. Nissan also said it uncovered (quote) “numerous other serious acts of misconduct” including alleged personal use of company assets and misuse of the company budget.
All three carmakers are poised to throw Mr Ghosn under the bus in coming days. They love doing that. And, of course, shares in all three companies have tanked, off the back of learning none of them could keep track of five billion yen on the balance sheet.
Nissan slumped more than five per cent, Mitsubishi dropped seven and (spectacularly enough) more than 13 per cent of Renault’s capitalisation evaporated across a couple of trading days earlier this week.
Big G – who is also fondly called ‘le Cost Killer’ after a slashfest … in the 1990s – is credited as being the wunderkind of shitbox manufacturer unification. As such, Nissan rewarded him handsomely. He was provided with homes in Rio De Janeiro, Beirut, Paris and Amsterdam – and I get the feeling he never flew economy class between any of them.
In June this year, by a slim majority, Renault Shitbox shareholders voted to approve a 7.4 million Euro pay package for le Cost Killer (obviously he never took that knife zealously to himself). That was for fiscal 2017. According to other securities filings, he also earned 735 million Yen for the top job at Nissan – maybe more, who knows? – and a lazy 227 million Yen from our lacklustre friends at Mitsubishi. That’s a total of about 17 million US dollars, or about 24 million in our attractive but pretend plastic ‘Strayan money.
So my question to you is simple: For $24 million bucks (‘Strayan) a year, and four homes on four continents (probably not slums, either), why cook the friggin’ books? Is your lifestyle tangibly better if you can up the ante under the table to – I dunno – $30 million a year?
I’d suggest for $24 million you’d eat the best food, drink the best wine, wear the best clothes, travel wherever you want, receive the best medical care and take more than adequate care of your closest 50 relatives and friends. Is it just because you can? And possibly because you have to be precisely that kind of cock to get to the top?
I’d love to know what you think. So have at it, in the comments feed below. Is it just absolute power corrupting absolutely? Ghosn is 64 years old – so he’s got another 20 years left, if he’s fortunate, ballpark. Would you risk spending half of your remaining life in a Jap prison, being a de facto hot water bottle for a former sumo star, for 10 long Tokyo winters, in exchange for a few million extra dollars that won’t make any tangible difference to the quality of the rest of your life?
By Shannon Jones:
22 November 2018
The arrest Monday by Japanese authorities of the leader of one of the world’s largest automotive alliances has drawn in the governments of France and Japan and shaken investors.
On Wednesday, a Japanese court extended the detention of Carlos Ghosn for an additional 10 days on charges of financial malfeasance, including hiding tens of millions in income from tax and other government authorities. Ghosn presides over an alliance of Japanese-based Nissan and Mitsubishi and French-based automaker Renault.
Prosecutors allege that Ghosn understated his income by about five billion Yen or $44 million in securities filings and that he used company assets for personal purposes. Authorities also arrested another Nissan executive, Greg Kelly, who they say helped in the scheme.
Under Japanese law suspects can be held for a period of time without the filing of formal charges and questioned by authorities without the benefit of legal counsel, though detainees can meet with attorneys.
Ghosn, who was credited with saving Nissan from bankruptcy, became a celebrity in corporate, media and political circles in Japan and around the world for his ruthless cost cutting. After a stint at Renault, Ghosn was assigned to Nissan where he carried out a restructuring involving the elimination of 21,000 jobs and the closure of five factories. Forbes anointed Ghosn “Businessman of the Year” in 2002 for his work at restoring Nissan to profitability. Later he carried out a similarly brutal restructuring at Renault earning him the appellation “Le Cost Killer.”
Ghosn stepped down as CEO of Nissan last year but remained the company’s chairman. He became CEO of Renault in 2005 and in 2016 he became chairman at Mitsubishi, receiving hefty compensation packages from all three companies.
The future of the Nissan, Renault, Mitsubishi alliance is now in question following Ghosn’s arrest. Nissan shares fell 15 percent on the news.
By some reports a full Nissan-Renault merger spearheaded by Ghosn was in the works, possibly just months away.
Opposition had emerged to the proposal for a Nissan-Renault merger. For one, the French government is a large shareholder in Renault and is unlikely to in effect cede control to Japanese-based Nissan, the most profitable of the three. There was also reported strong opposition on the Nissan board.
The arrest of Ghosn comes at a time when global automakers are under pressure because of slowing sales and the threat of disruptions due to trade war measures being enacted by the Trump administration in the United States and countermoves by the other major economic powers.
Moody’s credit ratings agency said that the arrest raised questions about Nissan’s governance and could affect its borrowing costs. Standard and Poors said it could lower the company’s credit rating. S&P said that Nissan’s profitability could suffer if it turned out that Ghosn’s alleged misconduct had hurt the company’s alliance with Renault and Mitsubishi.
The development of new technologies, including electric cars and autonomous vehicles, is sucking up enormous amounts of capital for research and development. It presages major changes in the auto industry whose ramifications are hard to foresee at this point. Whatever changes take place will entail sharp attacks on autoworkers.
Ghosn, a French citizen, was born in Brazil to Lebanese parents and was educated in France. His foreign heritage is unusual among CEOs in Japan.
There is speculation in some circles that Ghosn’s arrest may involve behind the scenes machinations by various parties, including possibly factions within Nissan. In a statement issued after Ghosn’s arrest, the Nissan board of directors said that CEO Hiroto Saikawa would introduce a motion to remove Ghosn and Kelly from their positions.
The Nissan board of directors is due to vote Thursday on the removal of Ghosn, and as of this writing appears to be divided on the issue.
Update: Ghosn was fired.
Many Renault senior executives are standing behind Ghosn and French President Macron indicated the government would not seek Ghosn’s ouster from leadership at Renault without proof that his illegal actions involved activities in France.
Meanwhile, Renault appointed an interim chairman and CEO to take over Ghosn’s duties while charges are pending.
The Lebanese foreign minister, Gebran Bassil, issued a statement saying he had instructed the Lebanese ambassador in Tokyo to follow the case and ensure fair treatment for Ghosn. Bassil said Ghosn “represents a model of Lebanese success abroad, and the Lebanese Foreign Ministry will stand by him in his crisis to make sure he gets a fair trial.”
There were apparently differences at Nissan over Ghosn’s focus on sales volume instead of profitability and quality. In particular, Ghosn sought to increase Nissan’s presence in the American market through heavy discounting. The new CEO at Nissan has questioned that approach.
The Ghosn affair is the latest of a number of scandals involving Nissan. In July the company admitted it had found that the majority of its factories in Japan had reported falsified emissions data. In 2017 the company acknowledged that it had allowed unqualified personnel to carry out preproduction tests at some of its plants, leading to the recall of vehicles.
Ghosn’s lifestyle illustrates the rapacity so typical of top-level corporate executives. He maintained homes in Paris, Amsterdam, Beirut and Rio de Janeiro and traveled around the world on a corporate jet. In 2016 he rented out the Grand Trianon at the Versailles Palace in France to celebrate his marriage to his second wife. The theme was based on Sofia Coppola’s film “Marie Antoinette” with guests dressed in pre-revolutionary costumes of the doomed nobility and featured extravagant desserts in homage to the queen’s supposed penchant for cake.
Nissan and Mitsubishi paid Ghosn some US$8.5 million in cash and stock and he received $8.4 million from Renault, enormous sums of money but still relatively modest in comparison to American CEOs. However, Ghosn’s compensation generated controversy in both Japan and France, where CEOs typically earn much less. Takeshi Uchiyamada, chairman of Toyota, for example, received $1.6 million in 2017.
In 2018 Ghosn agreed to take a 30 percent cut in compensation at Renault in order to ensure the backing of the Macron administration for another four-year term as head of the automaker.
According to a piece in the Washington Post one reason Ghosn may have sought to hide his income was to avoid further such problems.
Japanese broadcast organization NHK reported Nissan had paid Ghosn “huge sums” for luxury residences that were not for legitimate business purposes. The purchases were not declared on stock market filings while Ghosn did not pay, or underpaid, rent on the residences.
NHK alleged that nearly $18 million had been funneled through a Dutch subsidiary of Nissan to buy properties on the Copacabana strip in Rio de Janeiro and in Beirut. It went on to claim that Ghosn had secretly siphoned off money meant as compensation for other Nissan executives.
Kelly, Ghosn’s alleged accomplice and a reported “mastermind” of the scheme, is an American and the first US citizen to sit on Nissan’s board of directors. He first joined the company in 1988 as senior manager and associate legal counsel at Nissan North America. He was later named director of human resources.
These revelations only highlight how, under capitalism, the wealth produced by the sweat and blood of workers is squandered each day on to satisfy the grotesque appetite of the corporate and financial oligarchy.
Update April 2019: here.