From Le Cost Killer To Le Crook… Down Goes Carlos Ghosn, Down Goes Carlos Ghosn
Carlos Ghosn is a criminal. We can say so without fear of prosecution because Carlos Ghosn is a criminal who is facing serious financial misconduct charges in Japan. Ghosn is the chairman of the Renault-Nissan-Mitsubishi Alliance. Correction… he was. An internal investigation conducted over several months has found that Carlos Ghosn along with a senior executive, Greg Kelly, under-reported nearly $88 million. In simple terms, Ghosn and Kelly stole nearly $88 million between them.
Carlos Ghosn was detained and arrested in Japan on Monday. Japanese prosecutors subsequently obtained a warrant to search Nissan’s HQ. The investigation was started after a tip-off from an employee.
The charges against Ghosn and kelly are serious. Stealing corporate money for personal use is one charge. The other charge also relates to personal conduct. So this story is going to run and run particularly as Ghosn was such a high profile and respected CEO.
Shares in the Renault-Nissan-Mitsubishi Alliance took a hit dropping 13 percent. The news could affect the stability of the Alliance. Could it cause the alliance to fall apart? Maybe maybe not. It depends on the French and Japanese governments.
In the meantime, Carlos Ghosn was already very well renumerated. his multiple roles earned him up to $10m per year in salary. Astonishingly it seems that was not enough. Under-reporting financials of a publicly listed company is a serious criminal offense.
Ironically Ghosn was instrumental rebuilding Renault from an ailing brand in the 1990’s to what it is today. But it came at a cost. Literally at a cost. Ghosn undertook a series of savage cuts, deeply unpopular at the time and also problematic.
Ghons was subsequently hailed as a genius and a stable force who then built up the Renault-Nissan Alliance. An alliance that now includes Mitsubishi. The Ghons legacy is gone. Carlos Ghosn is now an embarrassment.
The tri-part alliance Ghosn created allowed him to become a defacto commander. Perhaps this unlimited power allowed Ghosn to believe he was untouchable.
The news of his arrest shows that ultimately greed is good… for the short term. But never underestimate the power of a whistleblower.