10 December 2018

A new silly season

December seems to have taken over the mantle of the silly season; usually the summer is noted as a period when parliaments are in recess and there is a dearth of news so the media casts around for off-diary stories to fill its pages in print and on the Internet.

Desperate journalists dig around in high profile people's’ private lives to find nuggets of truth and more often speculation on cases of misconduct or unusual behaviour.

In the last two months of 2018, news outlets have no such problems. We have the extraordinary spectacle of the Brexit negotiations - if that is the right way of expressing the stumbling about in the dark that we are experiencing in the UK, and in Europe.

This is widely reported in all forms of media so I was drawn to look again at the possible backstory to the Carlos Ghosn and Greg Kelly debacle.

Early this morning prosecutors in Tokyo have indicted the Nissan boss and his colleague Kelly, and also re-arrested them to extend their custody for a further 20 days, until December 30.

One new twist to the proceedings is that the Japanese authorities have included the Nissan Motor Company in its indictments, which center on the misstatement of Ghosn’s compensation by tens of millions of dollars in the company’s financial filings to the Tokyo Stock Exchange over a period of five years.

Nissan has stated that it: “will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”

This does rather make one wonder how such irregularities went unnoticed for so long, in a company that is well-regarded in the industry for its rigour in accounting and corporate compliance.

It has now emerged that there may well be a deeper and more Machiavellian element to the situation. In moves redolent of a Shakespearean plot, it appears that Ghosn was planning a considerable reshuffle of Nissan’s leadership, possibly including the ousting of Nissan CEO Hiroto Saikawa. Ghosn had allegedly been planning to reinforce Renault’s dominance of the Alliance as he was concerned that Nissan’s success under his leadership had made it too strong a partner.

The whole affair must be particularly galling for Carlos Ghosn as he has been lauded as turning Nissan’s fortunes around; the Japanese carmaker was technically bankrupt when Renault stepped in, as Japanese accounting principles showed all of Nissan’s debts and liabilities on the company’s balance sheet at the time of Renault’s investment. His husbanding of Nissan and the Alliance has seen the Japanese OEM’s fortunes transformed, with an aggressive new model development policy and global marketing and production expansion. It will be a tragic turn of events if a great man, who has made Nissan into a great global player, is ousted and punished by the machinations of smaller men.

Simon Duval Smith

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