Carlos Ghosn slaps $1 billion lawsuit on Nissan for his dismissal

Ex-CEO of Nissan was the architect of the automaker’s alliance with Renault SA and Mitsubishi Motors. He was ousted and arrested in 2018 for alleged financial misconduct.

By Autocar Pro News Desk calendar 20 Jun 2023 Views icon4587 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Carlos Ghosn

Carlos Ghosn

Carlos Ghosn, former CEO of Nissan Motor has sued the Japanese automaker and claimed over $1 billion in damages. The auto executive has claimed that there has been ‘deep damage’ to his finances and reputation as a result of his ouster and arrest in 2018 for which he is seeking reparation. He has filed the suit in the Court of Cassation in Lebanon where he is based since his dramatic escape from Japan in late 2019 to flee trial.

Ghosn was the man behind the Renault, Nissan and Mitsubshi alliance. Ghosn was sent by Renault in 1999 to turn around the Japanese carmaker. He later became chief executive officer of both companies and chairman of the alliance.

Ghosn's arrest in Japan sent shockwaves through the global auto industry. He has been vocal in his criticism of Nissan and Japan's legal authorities for removing him from the world's largest automaking alliance. Ghosn still faces criminal charges in Japan, is accused of underreporting his compensation, and a civil lawsuit filed by Nissan seeking monetary damages.

In his lawsuit, Ghosn asserted that the accusations against him have caused severe and lasting damage to his reputation and finances, which will persist throughout his life. The claims include $588 million for lost compensation and costs, along with $500 million in punitive measures. Additionally, the lawsuit addresses Nissan's shareholders' losses due to the company's failure to capitalise on the electric vehicle market.

The lawsuit, a copy of which has been seen by news agency Bloomberg, also targets several individuals, including Nissan employee Hari Nada, who is considered one of the main instigators behind Ghosn's ouster. Other senior Nissan managers and board members are also named.

Nissan has stated that it has not yet received the lawsuit and cannot comment on the claims made by Ghosn. Ghosn's legal representative mentioned that the lawsuit includes other parties that have yet to be served, and a hearing is scheduled for September in Lebanon. Cooperation between Japanese and Lebanese authorities in investigating Ghosn's assertions remains uncertain.

In 2020, a United Nations panel declared that Ghosn's detention in Japan for over 100 days was unjustifiable, unreasonable, and violated his rights. Ghosn has been critical of Japan's judicial system, alleging that it is rigged and violates fundamental principles of humanity.

The lawsuit outlines Ghosn's plans to bring Nissan, Renault, and Mitsubishi Motors together in a grand alliance with Fiat Chrysler, which raised concerns within Nissan that he aimed to make the partnership irreversible. According to Ghosn, Nada and others conspired to have him arrested in order to remove him from Nissan and the alliance.

Ghosn's legal action also describes his intention to take a voluntary pay cut in 2011 after new disclosure rules in Japan triggered efforts to find legal ways to retain and compensate him during retirement. These plans later formed the basis for Ghosn's arrest and the subsequent trial of Greg Kelly, a former Nissan director involved in the salary discussions.

The 18-page claim includes Ghosn’s plan to bring Nissan, Renault and Mitsubishi Motors under a grand alliance with Fiat Chrysler, which he says fueled concerns within Nissan in early 2018 that he was seeking to make the partnership irreversible. Nada and others then laid the groundwork to have Ghosn arrested in order to remove him from Nissan and the alliance, according to the former auto executive.

The lawsuit emphasises the defamation campaign launched against Ghosn by Nada and others, as well as the involvement of the Japanese and French governments, the purge of certain individuals from Nissan following Ghosn's arrest, the company's internal investigation, and the harm inflicted upon shareholders.

For Ghosn, the lawsuit represents an attempt to restore his reputation after his arrival in Lebanon, where he held a high-profile news conference denouncing his arrest in early 2020. The former auto executive, who spent part of his childhood in Lebanon, resides in a house that Nissan purchased and renovated for him, with plans for him to buy it upon retirement. “They cannot plot a lie and cheat and get away with it,” Ghosn said.

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