Carlos Ghosn Was Too Powerful, Nissan’s CEO Says
Mitsubishi Motors follows Nissan’s lead by ousting Ghosn as its chairman, the latest fallout from an arrest that has shaken the auto industry
TOKYO—Nissan Motor Co.’s chief executive told employees Carlos Ghosn had too much power as chairman, highlighting the tension that had been welling up between the two men before Mr. Ghosn’s arrest a week ago.
The fallout from the arrest spread Monday as Mr. Ghosn was ousted as chairman of Nissan partner Mitsubishi Motors Corp. , following his removal last week as Nissan’s chairman.
Nissan CEO Hiroto Saikawa was long seen as a close ally of Mr. Ghosn, but since Mr. Ghosn’s arrest he has painted a dark picture of the Brazil-born executive’s reign, saying he was improperly given the lion’s share of credit for Nissan’s revival in the 2000s instead of Nissan’s rank-and-file.
On Monday, Mr. Saikawa addressed employees for the first time since the arrest and said it was a problem that Nissan executives often communicated with their counterparts at alliance partner Renault SA RNO +3.21% through Mr. Ghosn. Now that Mr. Ghosn is gone, executives can communicate directly, which will better “ensure autonomy,” Mr. Saikawa said, according to a partial transcript reviewed by The Wall Street Journal.
Mr. Saikawa didn’t touch on the details of the accusations against Mr. Ghosn or propose specific revisions to Nissan’s alliance with Renault, said a person who listened to the discussion.
Prosecutors say they suspect Mr. Ghosn understated his compensation by a total of about ¥5 billion, or $44 million, in five years of Nissan financial reports filed to regulators through 2015. Separately, a Nissan investigation alleged Mr. Ghosn used money from a company fund intended for startups to have Nissan purchase homes for his personal use in Rio de Janeiro and Beirut, according to a person familiar with that investigation.
Mr. Ghosn has been jailed since his arrest and can’t be reached for comment.
Colleagues of Mr. Ghosn who were questioned by Nissan told the investigators that he believed he was acting appropriately when he didn’t report millions of dollars in deferred compensation, people familiar with Nissan’s investigation said.
Japanese public broadcaster NHK reported Mr. Ghosn has denied the allegations. A person familiar with the matter said former Japanese prosecutor Motonari Otsuru is representing Mr. Ghosn. Mr. Otsuru’s office declined to comment.
Mr. Ghosn also has hired U.S.-based law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, this person said. Brad Karp, the firm’s chairman and a defense attorney for major Wall Street banks, will represent Mr. Ghosn along with another of the firm’s partners, Michael E. Gertzman, the person said.
The Ghosn family believed the residences in Rio de Janeiro, Beirut and other locations were corporate housing, whose purchase went through the normal channels for Nissan approval, a person familiar with the family has said.
The arrest has jolted the three-way alliance of Renault, Nissan and Mitsubishi that was forged by Mr. Ghosn. The board of Mitsubishi, which is 34%-owned by Nissan, voted unanimously Monday to strip Mr. Ghosn of the chairmanship and named Mitsubishi CEO Osamu Masuko to the post for now.
Mr. Saikawa has said his immediate focus is making sure the revelations don’t impact Nissan’s operations. Nissan is working to raise prices in the U.S., which is proving difficult amid slowing sales in that market.
Another priority for Mr. Saikawa is the relationship between Renault and Nissan. While Renault holds a 43.4% stake in Nissan, Nissan holds 15% in Renault. The imbalance is the legacy of the circumstances under which the alliance was first formed, when Renault was the healthier car maker. Today, Nissan is the bigger and more profitable of the two. The French government is also a key player in the alliance because it holds a stake of just over 15% in Renault.
In 2015, the two companies revised their relationship when the French government sought to enforce recently granted double-voting rights for “long-term” shareholders in French companies. Mr. Saikawa led Nissan’s side in the talks. Ultimately, they agreed to limit the circumstances in which the French government could exercise double-voting rights in Renault, while Nissan gained the right to increase its stake in Renault if the government violated the agreement.
At the time, Mr. Saikawa called it “deterrence” and said: “We’ve been an equal partner based on mutual trust. But at the core, there were parts where we were not equal partners.”