Corporate coup: How a Nissan insider tore apart Carlos Ghosn’s legacy

The senior vice president orchestrated a campaign to arrest and dethrone then-chairman Carlos Ghosn in late 2018 on criminal financial-misconduct allegations

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Carlos Ghosn | Nissan | Nissan Motor

Behind every corporate coup is a mastermind. At Nissan Motor, that was Hari Nada, an insider known for his aggressive tactics and fondness for Marlboros, French cuff shirts and strong cologne.

The senior vice president orchestrated a campaign to arrest and dethrone then-chairman Carlos Ghosn in late 2018 on criminal financial-misconduct allegations. The aftermath has been messy. High-profile careers were destroyed, and chaos gripped management. Nissan is losing billions of dollars, and its alliance with Renault and Mitsubishi Motors is at risk of unravelling. Meanwhile, Ghosn is unlikely to ever face Japanese justice after escaping to Lebanon late last year.

A cosmopolitan business celebrity who speaks English, French, Arabic and Portuguese, Ghosn saved Nissan from ruin in the early 2000s. Yet in this multi-act corporate drama, the other leading role belongs to Nada, 56, according to a Bloomberg News investigation based on interviews with more than a dozen people, video footage and previously undisclosed internal company documents.

Bloomberg reported in June that Nada and a group of other senior executives, wary of Ghosn’s efforts to strengthen the carmaker’s alliance with Renault, mounted a methodical campaign to unseat the lionised leader almost a year before his arrest in Tokyo.

Hari Nada had been accused of alleged financial misconduct as well, but he had a cooperation agreement with prosecutors granting him immunity

Now, new reporting suggests just how far Nada and his allies were willing to go to remove Ghosn from power, settle scores and make major business decisions with little oversight. Ousting Ghosn from the car-making alliance he built sent shockwaves through the corporate world. And it jolted the foundations of not just one but three well-known auto brands. The actions of Nada, who remains at Nissan as a senior adviser, haunt the automaker and its partners to this day.

Among the key discoveries

• Nada arranged for a hack into Nissan’s computer systems and Ghosn’s corporate email account without informing key information-technology staff or the chief executive officer. That was months before he began working with prosecutors who later arrested the former chairman, according to current and former IT employees at the company.
• Former Nissan executive and Ghosn ally José Muñoz, now Hyundai Motor’s global chief operating officer, also feared arrest as part of the Nada-led putsch. Summoned to Tokyo, he refused to go after tip-offs from the US and Spanish ambassadors to Japan, people familiar with the matter said.
• Nissan’s top corporate attorney, Global General Counsel Ravinder Passi, claims that he suffered retaliation — including a Nissan-initiated raid, captured on video, of his home using a court order to seize company equipment — after raising whistle-blower complaints to the board about Nada running the internal probe into Ghosn’s alleged wrongdoing. Nada had been accused of alleged financial misconduct as well, but he had a cooperation agreement with prosecutors granting him immunity.

In one of the most audacious acts in recent business history, Ghosn staged a stunning escape from Japan in December while out on bail, being smuggled onto a private plane inside a music-equipment box during a $1.4 million operation financed partly with cryptocurrency. By fleeing, he forfeited 10 times that amount of bail money.

Accused of underreporting as much as $140 million in remuneration, misusing company funds and funnelling millions of dollars more into secret units for his own benefit, Ghosn still has questions to answer about his years atop Nissan and the world’s biggest car-making alliance. Those questions won’t be asked by Japan’s legal system, which Ghosn says he fled because it is unfair.

The arrests of Ghosn and former Nissan director Greg Kelly came as the company pursued greater production volumes only to see the global auto market sputter. Dogged by an ageing lineup and overcapacity at 16 plants spread across the world, sales are now being hammered by the pandemic. In May, the maker of the Pathfinder SUV and Altima sedan reported a $6.3 billion loss, and its market value has more than halved since the arrests 21 months ago. Nissan is said to have spent more than $200 million investigating Ghosn.

But these new revelations indicate that the turmoil within Nissan — and Nada’s apparent machinations — didn’t end with Ghosn’s downfall. They endured under the watch of Chief Executive Officer Hiroto Saikawa and his successor, Makoto Uchida, who took over eight months ago with a mandate to put l’affaire Ghosn behind the company. They raise questions about Nissan’s corporate governance and ability to emerge from the crisis.