Nissan chairman's arrest hurts sales

Ghosn sticks to denials of wrongdoing

Carlos Ghosn
Carlos Ghosn

TOKYO — Wednesday marked one month since former Nissan Motor Chairman Carlos Ghosn was first arrested on suspicion of understating his executive remuneration in securities reports for several years.

Ghosn continues to deny any wrongdoing even as the scandal that has tarred the automaker’s brand image rumbles on and concern grows within Nissan that it could hurt sales.

Ghosn, 64, is being held at the Tokyo Detention House.

He insisted after his arrest that he had done nothing wrong, and his assertions have not changed even after he was rearrested.

According to sources, Ghosn has met frequently with ambassadors and other officials from nations including his homeland of Brazil and Lebanon.

He is questioned for several hours a day by investigative authorities, but because this is done through an English interpreter, the actual length of the interrogations by prosecutors from the special investigation squad of the Tokyo District Public Prosecutors Office overseeing the case is shorter.

Ghosn initially grumbled that the detention facility was “cold,” but he has not complained about the facility recently, sources said.

When Ghosn is not being questioned, he spends his time reading books on European and Brazilian history and philosophy.


Former Nissan Representative Director Greg Kelly, an American, also continues to deny any wrongdoing over Ghosn’s remuneration.

Kelly, 62, has complained to the prosecutor in charge that his chronic neck ailment has worsened and that he has numbness in his hands and feet. So his lawyers plan to soon ask the Tokyo District Court to shorten his detention period.

According to sources, Kelly’s wife has delivered photos of his family and messages wishing him good health. Although Kelly has admitted he wants to go back to his home country quickly, he also has indicated a willingness to fight to clear his name.

Kelly said there was no way he would admit to the charges with a false confession when his reputation was on the line, the sources said.

A senior Nissan executive expressed a strong sense of urgency about the current situation facing the company.

“Things are not progressing as anticipated. The drop in sales is becoming a major problem in reality,” the executive said.

Several times a month, one Nissan sales outlet in the Tohoku region holds events at which people can test-drive new vehicles.

These events used to be packed with families and other potential customers, but since Ghosn was arrested, no one has shown up.


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Compounding the Ghosn scandal, Nissan announced on Dec. 7 it had “newly found” additional “nonconformities in the final vehicle inspection process” before shipping.

“In the past month, our business has completely fallen off,” the manager of the sales outlet said. “If this situation continues, our existing customers might drift away to other automakers.”

For Nissan, the state of progress in the investigation also has been unexpected. Nissan provided the investigation squad with information pertaining to suspicions that Ghosn misappropriated Nissan’s funds for personal use, such as by using a Dutch subsidiary to buy homes in Brazil and Lebanon.

Nissan believed these allegations would lead to a case of aggravated breach of trust under the Companies Law and other charges, but the hurdles to building such a case are high.

French automaker Renault SA holds about 43 percent of Nissan’s shares. Renault has not dismissed Ghosn as chairman and CEO because it says there has been no information about his rebuttals to the allegations.

Another Nissan executive said, “There might be differences in how things are perceived overseas, but I think that unless prosecutors craft a case showing Ghosn used the company for his own purposes, Renault won’t be convinced about the allegations.”

Ghosn was rearrested Dec. 10.

Because Ghosn remains a Nissan board member, if he were to be released on bail, it is possible he could attend a board meeting depending on the conditions of who will be allowed to meet him.

“Deep down, the executives are trembling with fear over what Ghosn might do,” a Nissan executive admitted.


One employee at a Nissan plant in Kanagawa Prefecture expressed frustration at how the scandal was dragging on.

“I want management to quickly sort everything out and concentrate on making good vehicles,” he said.

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