Nissan Investigates Claims Against CEO

According to four persons with firsthand knowledge of the situation, Nissan has opened an investigation into charges made by a top adviser that Chief Executive Makoto Uchida secretly carried out surveillance of his deputy Ashwani Gupta.

The surveillance claims made by Hari Nada, 58, a senior adviser at Nissan, reveal a stark split in senior management over Nissan’s relationship with Renault and concerns about transfers of intellectual property to the French carmaker. Reuters earlier reported that Gupta (who will be parting ways with Nissan this month) had clashed with Nissan Chief Executive Makoto Uchida over Uchida’s desire to close the negotiations with Renault quickly, with Gupta urging more caution over the terms of the deal.

In a letter written to the independent directors on the Japanese automaker’s board, Nada said Uchida carried out surveillance over a long period. Nada said it was an effort to acquire leverage to remove an executive and board member the Nissan CEO regarded as an obstacle to reaching a new deal with alliance partner Renault. Gupta had questioned the terms of the revised agreement Uchida is looking to finalize with Renault, according to Nada’s letter and the four people with knowledge of the matter.

Nada did not detail in the letter how he knew of the alleged surveillance of Gupta. Under Japanese law, a company can monitor communications on corporate phones and computers and investigate an employee’s conduct outside work in protecting its business interests.

In the letter, Nada claimed that during the week of April 10, Nissan evaluated the claims made against Gupta’s conduct and that Gupta had been asked to quit. According to three sources with firsthand knowledge of the situation, Gupta was the target of an inquiry into a complaint of harassment made by a female employee. The complaint was made in March, and according to reports, the inquiry was still ongoing when Gupta’s resignation was made public.

Details of the letter show how Nissan is still divided about its connections to Renault five years after the arrest of former CEO Carlos Ghosn on suspicion of falsifying his income, among other financial accusations.

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After bailing out Nissan in 1999, Renault sent Ghosn to turn the firm around. Later that year, Ghosn was the driving force behind a strategic alliance in which both companies acquired holdings in one another. More recently, Nissan and Renault announced new collaboration conditions in February following months of heated negotiations. Under the terms, the Japanese automaker would acquire a stake of up to 15% in Ampere, an electric vehicle company Renault is spinning out, while Renault would decrease its 43% holding in Nissan.

20181122-carlos-ghosn-rtr — *Carlos Ghosn*

By the middle of the year, the automakers hoped to get a definitive agreement ratified by their boards, but that deadline has now been pushed out to the end of 2023. The French automaker’s top executives, including Chairman Jean-Dominique Senard and Chief Executive Luca de Meo, had believed that Gupta was delaying or obstructing the deal’s completion.

In his letter, Nada expressed his opinion that Nissan CEO Uchida had exceeded his authority by entering into what he called “backroom deals” and making concessions and obligations. Nada also lambasted Uchida for moving forward with the purchase of a share in Ampere without providing a strategic justification and demanded that the acquisition be reviewed by an impartial financial advisor.

Nissan Motor's CEO Makoto Uchida speaks at a news conference in Yokohama — *Nissan’s CEO Makoto Uchida*

With this letter, Nada takes on Nissan’s top executive for the second time in relation to the Japanese automaker’s partnership with Renault. Ghosn had been planning a comprehensive merger of the companies until his arrest in 2018. He fled to Lebanon to avoid facing trial in Japan and has frequently claimed that Nissan executives, including Nada, were behind the prosecution against him because they were concerned about the prospects of a merger.

In the linked prosecution of former Nissan director Greg Kelly, Nada, who had cooperated with prosecutors in exchange for not being charged in the Ghosn case, stated that he thought a merger with Renault needed to be avoided in order to defend Nissan’s interests.

As part of a governance overhaul following the Ghosn incident, Nissan set up two executive committees in 2019, and Nada is a member of both of them. According to Nada, Gupta’s abrupt removal would act as a warning to those people who would be seen as challenging or anti-Renault.

Full story: Reuters