Nissan CEO denies ‘coup d’etat’ against Ghosn, talks about his ‘negative impact’

During an extraordinary hour-and-a-half long press conference, Hiroto Saikawa, CEO of Nissan, talked candidly as he could about the events leading to Carlos Ghosn's arrest, and his influence on the company.

In a spartan room, notable for the complete lack of Nissan branding, Saikawa read from notes for over 20 minutes, repeatedly stating the danger of concentrating too much power in one individual and referencing Ghosn's "long regime".

Although he noted individual power wasn't the only factor leading to Ghosn's downfall, he did believe it was a "primary driver".

Nissan's current CEO believes this unhealthy power structure built slowly, and says he will "look for a more sustainable structure", as well as eliminating "the negative aspects of the Mr Ghosn's regime", within the automaker and the three-headed Renault-Nissan-Mitsubishi Alliance.

As detailed in our earlier report, Ghosn and Kelly are accused of under-reporting Ghosn's income in official stock exchange filings. Ghosn is also accused of inappropriate use of corporate investment funds, and misusing company expenses.

Saikawa confirmed Carlos Ghosn, Renault CEO and Nissan/Mitsubishi chairman, had been arrested with his alleged co-conspirator Greg Kelly, a representative director on Nissan's board. The pair were named as the 'masterminds' in the affair, but Saikawa didn't say whether others were involved.

The Nissan CEO said the misdeeds were uncovered when the company conducted an internal investigation, inspired by a whistleblower tip-off. Due to the ongoing investigation from the prosecutor's office, Saikawa was unable to say when the tip occurred.

He did admit top executives were only informed about the internal investigation and its findings hours before today's press conference. Due to the nature of the allegations, only a small number of people had knowledge of the investigation.

Although it's up to prosecutor's office as to whether Ghosn or Kelly are to face criminal charges, Saikawa said, in his opinion, this behaviour is unacceptable and he is recommending the immediate termination of both men's contracts.

Reports have suggested payments to Ghosn were understated by around ¥5 billion ($60 million). During the media session, Saikawa would not elaborate on how this money disappeared or whether the company will sue to have the funds returned.

He also denied Ghosn's imminent ousting amounted to a "coup d'etat".

Interestingly, throughout the press conference Saikawa was rather downbeat about Ghosn's performance at the Japanese automaker.

When asked directly about whether his predecessor was a tyrant or dictator, Saikawa thought long and hard before responding: "Looking at the facts, he has done what not many other people could have done, especially at the initial stage.

"Mr Ghosn carried out a big reform and this is a performance we need to acknowledge, but after this there are pros and cons, this is what I feel.

"We are not going to deny what has been achieved, because there have been big things that have been done at Nissan [during his leadership]. But even if Mr Ghosn triggered [these events], after this trigger a lot of employees contributed in association with business partners."

Earlier he stressed the company's turnaround was the result of not just "these individuals" but also the "hard work of many, many, many employees, as well as the predecessors who faced financial difficulties in the 1990s".

Reflecting on "recent circumstances", Saikawa believes "not just in governance but in the real day to day operations there seemed to be a negative impact [from Ghosn]".

He noted Ghosn had fewer direct reports and relied on fewer sources of information in recent times, which may have contributed to his lower levels of performance.

"This could happen to anyone," Saikawa admitted. "I should be careful about this for myself."

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