Nissan files $90 million lawsuit against Carlos Ghosn to cover for regulator fines

Nissan says it plans to recover a significant part of the monetary damages inflicted on the company by its former chairman.

Nissan Motor filed a new civil lawsuit against former Chairman Carlos Ghosn seeking monetary compensation for the alleged financial misconduct that led to his prosecution last year, and the eventual, dramatic escape from Japan in December. The lawsuit was filed on Wednesday in Japan. Nissan said it was seeking 10 billion yen ($91.02 million) in damages.

The auto tycoon, who also headed Renault SA of France, was accused of failing to declare compensation accurately over the years. Japanese prosecutors arrested Ghosn in November 2018 over alleged breaches of financial trading law. After the dramatic arrest that shocked the auto industry and a prolonged detention, Ghosn was released on a $9 million bail in March 2019. However, he escaped from Japan at the end of December last year and arrived in Beirut from Turkey on a private plane.

Damages would increase in future

Nissan said on Wednesday that the damages would "increase in future", Reuters reported. Nissan filed the case as it foresees that it will have to pay fines to regulators due to Ghosn's alleged misconduct, the report added. The automaker, Japan's No.2. said it plans to "recover a significant part of the monetary damages inflicted on the company by its former chairman".

Carole Ghosn, wife of ex Nissan bossCarolsGhosn
Renault CEO Carlos Ghosn and his wife Carole Ghosn. Carlos Ghosn is being investigated by Renault and the French government for illegal use of their money. IB Times

The automaker also said it was mulling legal action against Ghosn for the "groundless and defamatory" remarks he made after his December escape. Ghosn had said in a news conference in Lebanon that his detractors inside Nissan were the reason for the downfall. "My unimaginable ordeal is the result of a handful of unscrupulous, vindictive individuals," he had said.

Japanese legal system had faced criticism over alleged vindictiveness in the Ghosn case from various quarters. Ghosn has denied all accusations of wrongdoing and said the Japanese legal system was rigged.

Le Cost Killer

Ghosn escaped from Japan as he was convinced that he was not likely to get a fair trial, people close to him said following his escape. The executive was "tired of being an industrial political hostage," the Wall Street Journal reported citing an unnamed source.

Ghosn is credited with transforming the loss-making Nissan into a modern company and pulling it back from the brink. He joined Nissan in 1999 after the 1996 acquisition of major stake by Renault. Nissan had been seeking a suitor since 1996.

Ghosn, who earned the nickname of Le Cost Killer during his stint at French carmaker Renault, came as an outsider to Nissan but quickly turned the iconic Japanese company around. Some of the drastic steps taken by Ghosn in the initial years included the shutting down of five loss-making factories and slashing as many as 20,000 jobs.

How did Ghosn escape?

Carlos Ghosn, Chairman of Nissan
Carlos Ghosn, Chairman of Nissan Nissan

Ghosn, who holds French, Lebanese and Brazilian citizenships, arrived in Beirut on December 29. Japanese public broadcaster NHK reported that a person who looked like Ghosn arrived at the Beirut international airport under a different name. Ghosn arrived in a private jet Beirut's Rafic al-Hariri international airport. The Japanese immigration authorities had no record of Ghosn leaving through any of the airports, the NHK said. The Financial Times said Ghosn came to Lebanon via Turkey and that he arrived on Monday.