Nissan expands internal investigation into Carlos Ghosn

Nissan's internal investigation into Carlos Ghosn now extends to every country in the group's global network and has significantly increased its use of digital forensics experts in its hunt for evidence, say people close to the company.

Although Mr Ghosn has already been formally charged on multiple counts of financial misconduct – all of which he denies – and is currently on bail in Tokyo awaiting trial, Nissan receives almost constant demands from prosecutors assembling information relating to the case.

Much of that information, say people familiar with the investigation, requires extraction from laptops, mobile phones, over a decade of archived data and millions of potentially relevant emails from Mr Ghosn’s 19-year leadership of the company.

Forensic IT experts are not only working to compile and recover digital evidence and render it fit for use in court, but are also helping to establish, at the request of both prosecutors and Nissan’s management, historic patterns of behaviour surrounding Mr Ghosn and a number of business associates in the Middle East and Latin America.

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“The investigation now covers pretty much everywhere and everything,” said one person briefed on the situation, who said that as well as satisfying the prosecutors the internal investigation was aimed at closing the “open-ended liability” that Nissan itself faces at certain of its operations around the world.

As the investigation enters its eighth month since the arrest of Mr Ghosn and his close aide Greg Kelly in Tokyo last November, the geographic focus has sharpened on Brazil. Nissan continues to look into whether its former chairman and close members of his family were benefiting personally from payments made by the company and its subsidiaries.

One of the biggest problems that investigators have encountered in Brazil has been the practical difficulty of talking to relevant people: since the end of the 2016 Olympics in Rio, a large number of employees of one of Nissan’s local Brazilian subsidiaries have left the company and been unavailable for questioning.

Apartment search

People close to the Ghosn family have previously pointed out that a search by Nissan lawyers and judicial officers of the apartment in Brazil that was rented by Nissan and being used by Mr Ghosn did not lead to any major discoveries in the case.

The expanded investigation has been combined with an operation described by people involved as a “clean-up” – an effort to purge the company of the alleged anomalies that arose during Mr Ghosn’s long tenure at the top.

The issues associated with Mr Ghosn’s longevity as the head of Nissan features strongly in a report published last week by the proxy advisory firm Institutional Investors Services. The report, ahead of Nissan’s first annual general shareholders’ meeting since Mr Ghosn’s arrest, recommends that investors vote against the reappointment of the current chief executive, Hiroto Saikawa.

The report repeated the findings of a committee on improving Nissan’s corporate governance that the company had built a corporate culture “moulded by Ghosn’s effective dictatorship”.

In an argument that hints at the likely direction of Nissan’s internal investigation, the ISS report called on investors to question whether the wrongdoing of which Mr Ghosn and Mr Kelly have been accused could really have been conducted by them alone. The creation of misleading financial statements, concluded ISS analysts, “would be impossible without the help of insiders, who actively supported or turned a blind eye to their wrongdoing”.

A spokesperson for Mr Ghosn was not immediately available for comment. – Copyright The Financial Times Limited 2019