Nissan Motor Co. filed a civil lawsuit against its former chairman Carlos Ghosn on February 12, 2020, seeking $91 million in damages. The suit was lodged in Yokohama District Court. Nissan aims to recover money lost through years of alleged misconduct and fraudulent activity by Ghosn. The former chairman is accused of understating his income and diverting company assets for personal use. He currently resides in Lebanon after fleeing Japan while on bail for criminal charges.
The lawsuit and its claims
Nissan’s civil complaint targets Ghosn for actions spanning his tenure as chairman. The company says it wants “to recover a significant part of the monetary damages inflicted on the company by its former chairman as a result of years of his misconduct and fraudulent activity.” The ¥10 billion claim covers money Ghosn allegedly spent on renting properties abroad and using corporate jets for personal trips. Nissan stated the amount could rise as it seeks to recover fines and penalties it will be forced to pay because of Ghosn’s behavior.
The lawsuit follows criminal charges filed in Japan in 2018. Prosecutors accused Ghosn of underreporting his salary by millions of dollars over several years. They also alleged he transferred personal trading losses to Nissan and used company funds for luxury homes in Beirut, Rio de Janeiro, and Paris. Ghosn has denied the criminal allegations.
Ghosn’s flight and response
Ghosn jumped bail in November 2019. He was under house arrest in Tokyo. He fled to Lebanon hidden in a music equipment case on a private jet. Japan has no extradition treaty with Lebanon. That makes his arrest unlikely.
In response to the lawsuit, Ghosn said: “Nissan’s maneuvers continue: this complaint is made public on the eve of the Japanese group’s financial results.” He has repeatedly pleaded not guilty to the criminal charges. He has lashed out at Japan’s judicial system, calling it “rigged.” Ghosn claims he was the victim of a boardroom coup by Nissan executives who feared he would merge the company with alliance partner Renault.
Counterclaims and ongoing legal battles
Ghosn is not staying quiet. He is pursuing his own claims against Nissan. He seeks $16.4 million in lost salary. That money, he argues, was wrongfully withheld after his arrest. His legal team has filed complaints in French and Dutch courts. Those cases involve his compensation from a Renault-Nissan joint venture based in the Netherlands.
The former chairman has also filed a lawsuit in Lebanon against Nissan and its former legal counsel. He accuses them of defamation and false accusations. That case is ongoing.
Impact on Nissan and the alliance
The Ghosn scandal has damaged Nissan’s reputation. It has strained the company’s relationship with alliance partners Renault and Mitsubishi. Ghosn led the alliance for two decades. He was the architect of the cross-shareholding structure that linked the three automakers.
Since his arrest, Nissan has overhauled its governance. The company created a special committee to review executive pay. It also strengthened internal controls. But the alliance has wobbled. Renault and Nissan have struggled to rebalance their partnership. The French government, a major Renault shareholder, has pushed for a merger. Nissan has resisted.
The scandal has also hurt Nissan’s bottom line. The company reported a 6.7 billion yen operating loss for the third quarter of 2019. It was the first quarterly loss in over a decade. Nissan cut 12,500 jobs worldwide. It slashed production capacity by 10 percent.
Ghosn remains a fugitive from Japanese justice. He lives freely in Beirut. He gives interviews and writes books. He maintains a public relations campaign against Nissan and Japan’s legal system. The civil lawsuit adds another layer to a saga that has captivated the business world. The outcome remains uncertain. But one thing is clear: the fallout from Ghosn’s downfall will continue to shape Nissan for years to come.
