Ghosn Investigation Reaches U.S. And Renault

As The North American International Auto Show happens in Detroit, Renault CEO and former Nissan CEO Carlos Ghosn continues his detention in a Japanese jail. And the scandal and controversy surrounding the executive who once commanded standing-room-only press conferences at this show hit its U.S. operations.

Nissan, which ousted Ghosn in November and assisted Japanese authorities in building a case against the CEO, has accepted the resignation of Jose Munoz, the former head of its North American operation and most recently the Chief Performance Officer of Nissan. Munoz’s exit appears to be connected to a probe into how some Southern California Nissan franchises were awarded, and if the process was proper.

Munoz, a fierce executive known for his hard-charging and demanding style, was a top lieutenant of Ghosn. He left his North American responsibilities last year to pay more attention to China for Ghosn.

Nissan has been making great sales gains in the U.S. in the last five years as some of its crossovers really caught on with buyers, namely the Rogue and Murano, on top of the success of the Altima sedan.

Ghosn and former Nissan board member Greg Kelly are under indictment for violation of Japan’s financial disclosure laws. Ghosn has been in a detention facility since last November, while Kelly has been released for health reasons.

While Ghosn has been protesting and asserting his innocence, more information, charges and conflicts of interest continue to emerge.

The issue with two California franchises is that they are owned by a Saudi who has ties to another Saudi businessman Ghosn was personally doing business with.

The latest problem for Ghosn is the disclosure that he directed an unknown salary of $572,000 to be paid to Renault General Secretary Mouna Sepehri, who is responsible for corporate governance in her role as board secretary for an undisclosed post at the Renault-Nissan BV Alliance, which Ghosn also ran. Her actual job at The Alliance is being investigated.

Sepehri currently sits on the Alliance board with nine other Renault and Nissan executives and is the only director who drew a compensation package directly from the subsidiary, according to a Reuters report.

The revelation points to Ghosn’s management of the Alliance empire as a kingdom, with both Renault and Nissan paying attention to proper governance until Nissan cooperated with Japanese Justice officials last year. Ghosn, because of his imperious style, had created a culture at Nissan’s Japanese headquarters that resulted, according to press reports, employees breaking out in applause upon learning of his arrest.

Ghosn and Kelly have been formally charged in Japan with failing to disclose $43 million in additional compensation for 2010-15 that Ghosn had arranged to be paid later. They deny that the deferred compensation agreements were illegal or required disclosure. Ghosn is also being investigated for mixing his personal investments with Nissan’s books with Kelly’s participation and complicity.

Currently, Editor-in-Chief of New Roads Media, I have covered all aspects of the auto industry for some thirty years for publications including USA Today, Businessweek, AOL Autos, Popular Mechanics, Adweek and Advertising Age. Besides my journalism experience, I have also w…


David Kiley covers the global auto industry for and other outlets. He is co-author of the 2015 book: Writing The War: Chronicles of a WWII Correspondent. Prometheus Books.

Source from: Forbes