Business / Corporate

Nissan and Mitsubishi consider closing Dutch joint venture after Ghosn drama

JIJI

Nissan Motor Co. and Mitsubishi Motors Corp. are considering closing a Dutch joint venture from which some ¥1 billion in remuneration was allegedly paid to their ousted former chairman, Carlos Ghosn, in a nontransparent way, it has been learned.

The automakers believe the scrapping of Nissan-Mitsubishi BV is inevitable in light of the allegations, informed sources said Friday.

Ghosn has been indicted on the suspicion of financial misconduct. He was released on bail Wednesday after being detained for more than 100 days since his Nov. 19 arrest. Shortly after his arrest, he was dismissed as chairman of both companies.

In January, Ghosn resigned as chairman and CEO of Renault SA, the French alliance partner of Nissan and Mitsubishi.

Ghosn and his aides began considering setting up the Dutch joint venture around June 2016, soon after Nissan decided to invest in Mitsubishi to support the reconstruction of its troubled peer, which was under fire over a fuel-efficiency data manipulation scandal at the time, according to the sources.

While some believe the establishment of the joint venture was intended to pay Ghosn remuneration that would not be subject to disclosure in Japan, Ghosn’s side had told Mitsubishi the joint company would draw up strategies to maximize the effects of its partnership with Nissan, the sources said.

Nissan-Mitsubishi was formed in June 2017 as a fifty-fifty joint venture.

The two companies injected about ¥2.1 billion into it last year to help cover its operating costs. But about half the amount was paid to Ghosn, one of its board directors, between April and November 2018, according to the sources.

Nissan CEO Hiroto Saikawa and Mitsubishi CEO Osamu Masuko, both also Nissan-Mitsubishi board members, have received no remuneration from the joint company. The two automakers plan to set up a new framework to strengthen their partnership, the sources said.