At Nissan's annual meeting, Carlos Ghosn looms even years after arrest

Carlos Ghosn. (Photo: Bloomberg)
Two-and-a-half years after Carlos Ghosn’s arrest, Nissan Motor Co. is still struggling to emerge from the scandalized affair involving the former chairman and chief executive officer.

Shareholders at the Japanese automaker’s annual meeting on Tuesday repeatedly questioned executives about the events surrounding Ghosn’s 2018 arrest, suggesting that Nissan was perhaps better off during the former auto executive’s era of management.

“Under Ghosn’s leadership there were a lot of good things. There were a lot of beautiful flowers within Nissan,” one said during questioning at the company’s headquarters in Yokohama, pointing to a period four years ago when the three-way alliance of Nissan, Renault SA and Mitsubishi Motors Corp. topped global sales volumes.

Nissan has posted two straight years of losses since Ghosn was arrested on charges of financial misconduct, albeit as the global automotive industry as a whole has faced numerous disruptions from the pandemic and a crippling shortage of semiconductors. Last year, Nissan unveiled a turnaround plan that involves breaking away from the Ghosn-era strategy of selling cars at steep discounts to increase market share, which cut into profits.

The shareholder was not convinced: “Incentives and discounts — those are evil? Even with incentives it’s better to sell cars don’t you think?”
Makoto Uchida, who took over as CEO a year after Ghosn’s arrest, stuck behind Nissan’s current strategies, arguing that much of the pain the company is feeling today stems from brand damage caused by pursuing volume too intensively in the past. “Nissan is making steady progress with its business transformation plan,” with April and May performance exceeding expectations, Uchida said.

The automaker posted a 151 billion yen ($1.4 billion) operating loss in the recently ended fiscal 2020 year and is targeting flat annual profit for the current year. “We’re doing everything that we can to avoid making losses three years in a row,” Uchida said.

During the course of the roughly two-hour meeting, executives were also quizzed about media reports indicating individuals at Nissan had conspired to have Ghosn arrested, which Uchida said had no merit. Another shareholder opposed the re-election of directors who were present when Ghosn was removed because the matter should have been handled internally without damaging Nissan’s brand value, he said.

Ghosn, who escaped trial in Japan at the end of 2019, is now residing in Lebanon and has denied the charges of financial misconduct. Greg Kelly, the former Nissan director who was arrested alongside Ghosn, is fighting the charges against him in an ongoing trial in Tokyo.

At the end of the annual meeting, shareholders approved the reappointment of Uchida and 11 other directors. Renault is Nissan’s biggest shareholder with a 43% stake in the Japanese automaker. Another proposal that would have seen Nissan and Renault’s alliance agreement disclosed was rejected.

“With regard to the former chairman, we have caused concern to shareholders,” Uchida said. “Trust is not something that can be built back over night. However, we are seeing signs of recovery.”

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel