TOKYO — After 4 a long time of dedicating himself to Nissan Motor Co., Hitoshi Kawaguchi discovered himself in 2018 immediately troubled in regards to the comany’s path.
Carlos Ghosn, then chairman of Nissan and its French accomplice, Renault, was maneuvering to orchestrate a merger between the businesses.
However Kawaguchi, senior vp in command of authorities relations on the time, and different senior Nissan executives thought that was a nasty concept, he testified this month within the felony trial of their onetime colleague, former human sources officer and Nissan director Greg Kelly.
As a clique of highly effective executives grew involved about Ghosn’s integration plans, Kawaguchi mentioned, in addition they secretly labored to report allegations of wrongdoing by Ghosn to prosecutors, resulting in the longtime chief’s November 2018 arrest.
The executives met two or thrice every week in a personal lunchroom to seek the advice of in regards to the matter, Kawaguchi testified.
However Kawaguchi maintained that these have been two separate points — the merger they did not need and the allegations of monetary improprieties by Ghosn.
“We by no means fabricated any piece of proof to substantiate this crime as a solution to cease a merger,” Kawaguchi mentioned in court docket.
His testimony nonetheless might lend credence to Ghosn’s competition that the felony fees towards him in Japan have been concocted by Kawaguchi and a small cabal inside Nissan to dam the merger he deliberate.
Ghosn and Kelly, Nissan’s solely American director on the time, have been arrested on the identical day in a coordinated swoop and charged with scheming to cover greater than $80 million in deferred compensation supposedly owed to Ghosn.
Each Ghosn and Kelly deny any wrongdoing, however Kelly was left to face trial alone in Tokyo after Ghosn jumped bail and secretly fled to Lebanon on the finish of 2019.
Kelly faces as much as 15 years if convicted.
In his testimony, Kawaguchi, who retired in 2020, claimed that he and two different executives — Statutory Auditor Hidetoshi Imazu and Hari Nada, then head of Nissan’s CEO workplace — have been of like minds when it got here to Ghosn’s plan to fold Nissan and Renault collectively in an “irreversible” alliance. They more and more perceived Ghosn as a problem to Nissan’s independence due to his obvious shift in perspective in 2018 towards favoring integration of the 2 automakers, he mentioned.
Kawaguchi mentioned he noticed the present alliance as efficient, and as an alternative of a merger, he favored a rebalancing of the 2 corporations’ cross-holdings to present Nissan extra equal footing.
The concept of integrating Renault and Nissan grew to become a flashpoint in February 2018 when Renault moved to resume Ghosn’s contract for 4 years and made an “irreversible” merger a part of his mandate. Kawaguchi testified that opinions on a merger have been divided inside Nissan and that the governments of France and Japan had been in discussions in regards to the path of the alliance.
However at the same time as Kawaguchi, Nada and Imazu opposed the merger, Kawaguchi mentioned, in addition they started investigating suspicion of misconduct by Ghosn. The probe started with Imazu, who was trying into journey and housing expenditures the corporate paid on Ghosn’s behalf — although these issues ended up being unrelated to the crimes Ghosn was finally charged with.
In the long run, Ghosn was charged with improperly reporting compensation, the allegations now on the middle of Kelly’s trial. Ghosn faces further breach-of-trust fees on allegations of diverting firm funds for personal use. These indictments are unrelated to the case towards Kelly.
Kawaguchi claimed he was pulled into an inside investigation in March or April of 2018. Imazu took their findings to prosecutors in July, bypassing the Nissan board and the corporate’s then-CEO, Hiroto Saikawa, who was apparently unaware of the probe’s early phases.
In court docket, Kawaguchi mentioned his group of insiders went to prosecutors as an alternative of Nissan’s administrators as a result of they thought their accusations of misconduct would fall on deaf ears at a Ghosn-controlled board.
“We had no different possibility however to depend on the Tokyo Prosecutors Workplace,” he mentioned.
Kawaguchi denied that the three colleagues cooked up crimes to border Ghosn. However to others, the timing appeared all too coincidental.
Kelly’s U.S.-based protection legal professional Jamie Wareham referred to as Kawaguchi’s testimony one of the best proof but of a company coup towards Ghosn.
“We’ve got now confirmed it,” Wareham mentioned in separate feedback after Kawaguchi’s testimony.
“The cost was invented by Japanese each inside the corporate and inside the federal government who didn’t need what Ghosn was heading down the trail of, which was a merger with Renault,” he mentioned. “They weren’t certain do it. They headed down that path by discovering a criminal offense, any outdated crime. … It was predetermined, preordained. And it was meant to maintain Nissan Japanese.”
Though Kawaguchi helped lead the probe into the allegations, prosecutors apparently noticed his testimony as including little to their case. At trial, they declined to pose a single query to him.