Ghosn arrested for securities fraud

[fumi]

Carlos Ghosn, former CEO of Nissan and soon-to-be-ex-president of Nissan and CEO/president of Renault and Mitsubishi, was arrested in Japan for securities frand.  Apparently he falsified securities reports and underreported his salary by 5 billion yen and appropriated company money for his personal use.  His alleged compliance in the Nissan board of directors is also arrested.

After killing off all the fun and saddling the lineup with long in the tooth models in the name of cost cutting for almost 20 years, I am not sad to see him go.  I am hoping for a change of direction, but with Renault still holding a leash on Nissan, I am not holding my hope up.

 

Edited November 20, 2018 by fumi
Seems a lot of people here have never heard about le cost killer

[Ace-Garageguy]

Well, if he was at the helm when Nissan brought out the Puke, he should be charged with gross artistic negligence as well.   

[Exotics_Builder]

2 hours ago, Ace-Garageguy said:

Well, if he was at the helm when Nissan brought out the Puke, he should be charged with gross artistic negligence as well.   

[gtx6970]

Ive no fricken idea what this is about, and doubt I'm alone

[iamsuperdan]

Okay, for those as confused as I was, Carlos Ghosn is the chairman of Nissan and he has been arrested for "significant financial misconduct."

I've never hear his name before, but the Nissan/Renault alliance is perhaps one of the biggest automotive partnerships in the world. 

So yeah, this is a big deal.

 

https://www.cnn.com/2018/11/19/business/carlos-ghosn-nissan-renault/index.html

[Rob Hall]

Pretty familiar name from the auto industry..I've seen mention of him in car magazines for probably 20 years..

Edited November 20, 2018 by Rob Hall

[Greg Myers]

I love my 2013 Maxima. 

[Dave Ambrose]

He was held out as someone who practically walked on water. He'd commute between France and Japan, getting his sleep on an overnight flight. Now he's in a Japanese jail. The Nissan CEO held a press conference that didn't reveal much of substance, but alluded to some severe misconduct and lack of proper oversight. 

I was surprised to learn that Mitsubishi was also part of the alliance. 

My, how the mighty have fallen.

And, for the record, I loved our Xterra and I'm mostly happy with our Frontier. But I wonder why they did away with the torsion bar front suspension. 

[mikemodeler]

This is a huge deal in the OEM world. Financial misconduct is a nice way of saying "stealing money". He has been one of the most talked about OEM CEOs in recent memory and has tried/proposed mergers with several manufacturers. He is ego driven and is notorious for his cost cutting ways to profitability, often at the expense of quality or design. He will most likely do some jail time but his days in the OEM world are through.

[fumi]

 

2 hours ago, mikemodeler said:

This is a huge deal in the OEM world. Financial misconduct is a nice way of saying "stealing money". He has been one of the most talked about OEM CEOs in recent memory and has tried/proposed mergers with several manufacturers. He is ego driven and is notorious for his cost cutting ways to profitability, often at the expense of quality or design. He will most likely do some jail time but his days in the OEM world are through.

"le cost cutter" was synonymous with Nissan since 1999, when Renault sent him to restructure Nissan.  While I agree that cutting the redundant models and dealership channels which were a legacy of the bubble economy was inevitable, he went further with an un-Japanese move and cut all contracts with their long time suppliers which he deemed "unprofitable".  This drove a lot of the small and middle sized OEM suppliers, many of them partners with Nissan for decades, to bankruptcy and the quality of their cars took a nosedive.  After the effect of cost cutting waned, design and development took a hit and models were left to languish for 10 years and more without refreshment.  Engine development was cut up particularly bad, to the point where most of the engine lineup dates back to 2010 or older.

But he did turn around the company and people worshipped him so much that a manga was actually written that showcased his life.  He eventually took over the CEO job of Renault as well and became chairman of Mitsubishi when Nissan got a controlling interest.  I guess his ego ultimately took the better of him and he believed he could to anything.

[PatW]

It amazes me when the heads of these huge companies across the world get millions in salary and bonuses each year however badly the companies are run/perform/ go into the red, the bosses have to have their hands even deeper in the till! We've had a few here recently who've run major retail groups, they've not only given themselves huge salaries and bonuses when the companies are going under, but also stolen the workers pension funds as well. So once they go bust the ex-staff have nothing to live on after 30-40 years service. But nothing gets done because these crooks have the rich and famous in the government as friends who are also less than honest!

To them we are just cannon fodder for their dishonesty!

Edited November 20, 2018 by PatW

[espo]

In the U.S. this would usually be called Tax Evasion on the Government side, and Stealing from your employer on the other counts. It never seem to amaze me the cense of entitlement that some very powerful people have no matter how much you pay them.      

[yellowsportwagon]

Nissan should fire its entire styling dept too. Everything they make is hideous even the GT-R. The Puke was bad but what about that Cube abortion? Infiniti isn’t far behind in ugly. The big SUV thing looks like a Sperm Whale. To top it off they are junk on top of it. The Chrysler of Japan.

[martinfan5]

On 11/20/2018 at 8:51 AM, Dave Ambrose said:

He was held out as someone who practically walked on water. He'd commute between France and Japan, getting his sleep on an overnight flight. Now he's in a Japanese jail. The Nissan CEO held a press conference that didn't reveal much of substance, but alluded to some severe misconduct and lack of proper oversight. 

I was surprised to learn that Mitsubishi was also part of the alliance. 

My, how the mighty have fallen.

And, for the record, I loved our Xterra and I'm mostly happy with our Frontier. But I wonder why they did away with the torsion bar front suspension. 

I loved my 2001 Maxima , even with 300, 000 it was still going, till the fire killed it.    Our 2015 Altima is a decant car,  no real issues to complain about , had to that the POC CVT transmission repaired about a month back, but Nissan ate the most of the cost on that one for us. 

All I can say is , you play with fire , you are gonna get burned, and he did, he knew what he was doing, and I am sure he knew it was gonna catch up to him.

[martinfan5]

On 11/20/2018 at 7:55 AM, Greg Myers said:

I love my 2013 Maxima. 

I am happy , your body style or "Gen" of the Maxima are finally starting to get a little bit cheaper, just a few years ago, a 2010/11 was selling for close to $20k.   Now I am torn , I want to get another 01-03 Maxima to replace mine ( RIP), but I would love to get the generation you have.

[STYRENE-SURFER]

There are some saying this may have some repercussions pertaining to the Renault Formula One team.

I guess he was a bit of an F1 fan and thru some corporate money that direction.

Wonder how Daniel Ricciardo is feeling about his team change now.

[1930fordpickup]

On 11/21/2018 at 9:41 AM, espo said:

In the U.S. this would usually be called Tax Evasion on the Government side, and Stealing from your employer on the other counts. It never seem to amaze me the sense of entitlement that some very powerful people have no matter how much you pay them.      

I agree with this. They seem to think we owe them more even after they are paid millions.  They should lose everything just as a drug dealer does, everything. Ordered to repay all that is lost and everything he earned plus interest while he was employed there. 

[vamach1]

In the old days disgraced executives in Japan would commit suicide to save the family more embarassment.  We'll see how this ends. 

[fumi]

58 minutes ago, vamach1 said:

In the old days disgraced executives in Japan would commit suicide to save the family more embarassment.  We'll see how this ends. 

These days they just get on stage in front of cameras, bow profusely, and life goes on as usual.

My guess is Ghosn will get a slap on the wrist, publish a memoir or two, and probably get back to the business scene in Europe.  As of now Renault is still keeping him as CEO and chairman.

[PatW]

At the beginning of this week he was set free and then re-arrested as he left the prison in Japan, on other charges of miss-using  company funds! We'll see how long he stays inside until other charges or a re-release is agreed!

[tim boyd]

Folks....there are many angles to this story.  Automotive News, the respected worldwide tabloid covering the auto industry, is a good source on the latest developments (www.autonews.com).  One angle being alleged by some, not mentioned in the thread above  (and covered extensively in Automotive News) is that the entire episode is a "coup" engineered by Nissan leadership to revisit the terms of the Nissan/Renault/Mitsubishi alliance on terms more favorable to Nissan/Japan.  The Wall Street Journal has also extensively reported on this series of events, including speculation that Ghosn was headed to Japan for a Board Meeting where he planned to fire the recently promoted CEO of Nissan.  

There is probably yet much more to surface on this (on both sides of the issue) in the weeks and months to come.     TIM

Edited December 24, 2018 by tim boyd

[espo]

I would seem, based on what Tim Boyd mentioned, that no one is playing by the "rules". Will be interesting how this plays out.  

[PatW]

No one plays by the 'rules' in business!

[fumi]

Based on what I read in Japanese and English media, this is part of what happened:

1. Ghosn admitted that he preferred to be paid in US dollars but Nissan would only pay him in Japanese yen, so he invested his salary in USD/JPY FX derivatives.  His investment (or more fittingly, gamble) suffered huge losses in the financial crisis in 2008 and his bank asked him to put in additional collateral, or they would call his margin.

2. Ghosn had the Nissan board of director pass a resolution to authorize Nissan to enter into foreign exchange contracts "for the benefit of non-Japanese corporate officers and directors at no cost to the company."

3. Ghosn asked his acquaintance in Middle East for help.  His acquaintance provided his bank a 3 billion yen "standby credit note".

4. There was an attempt to have Nissan head office to invest 3 billion yen to his acquaintance's company in Oman.  This did not work out.

5. Nissan Middle East then paid his acquaintance's company 14.7 million US dollars (around 1.6 billion yen).  Ghosn maintains this is for "critical services that substantially benefited Nissan."

[espo]

When you gamble and lose you lose. You don't go biting the hand that feeds you because you made the wrong bet.