Carlos Ghosn loses legal battle over removal by Nissan and Mitsubishi

Carlos Ghosn has been ordered to repay €5m to Nissan and Mitsubishi after a Dutch court rejected his claims to have been unfairly removed by the carmakers in the first legal ruling on the fugitive former car titan.

The court concluded there was no employment contract between Ghosn and a Dutch holding company of alliance partners Nissan and Mitsubishi, ordering the former chair to repay the salary he received from the joint venture between April and November 2018.

Ghosn, who led Renault and Nissan for two decades, was arrested in Japan in late 2018 on financial misconduct charges, which he has denied.

The dismissal of Ghosn’s legal action came with a blunt judgment on the former chair’s contribution to Nissan-Mitsubishi BV, and his right to claim compensation for the work he had performed. 

“It has not been sufficiently established that [Ghosn] actually performed work worthwhile for the benefit of NMBV,” read one of the closing paragraphs of the judgment. 

Ghosn’s lawyers have argued that he devoted time to create synergies for the Renault-Nissan-Mitsubishi Alliance, which under his tenure grew to become the largest carmaking group in the world. The former chair was seeking €15m in payment from NMBV.

Following a joint investigation, Nissan and Mitsubishi accused their former head of allegedly receiving €7.8m of improper payments from the joint venture, which was established in 2017, only months after Ghosn stepped back from being Nissan’s chief executive.

Lawyers for Nissan described Ghosn “as a spider in the web aimed in particular at self-enrichment”.

In a statement on Thursday, Nissan said: “We are pleased that the court has dismissed Carlos Ghosn’s unfounded claims against NMBV and ordered Mr Ghosn to repay the significant sums he appropriated unlawfully.”

The Dutch court’s decision could reverberate back in Tokyo where one of Ghosn’s once trusted lieutenants, Greg Kelly, is on trial on charges that he conspired to conceal the true size of Ghosn’s salary. 

The prosecution of Kelly, which is now into its eighth month of hearings in the Tokyo district court, has touched on the role of various subsidiaries set up by Nissan. Part of Kelly’s defence has been to argue that those subsidiaries would only reward Ghosn for work he had done on their behalf.

In late 2019, Ghosn broke house arrest and fled to Lebanon, which does not have an extradition treaty with Japan, where he has protested his innocence. Representatives for Ghosn did not immediately respond to a request for comment.

As well as the Dutch suit, Ghosn also faces a phalanx of legal cases globally, including civil cases from Nissan, a US securities claim by institutional investors and an eviction case in Lebanon.

In September 2019, both Ghosn and Nissan settled fraud charges with the Securities and Exchange Commission in the US over allegations his pay was under-reported. Without admitting guilt, Ghosn paid $1m in the settlement, while Nissan paid $15m.

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