TOKYO — Outside Nissan Motor Co., Hari Nada was a little-known executive with a big role prior to the arrest of former Chairman Carlos Ghosn. He was a head-office heavyweight in the automaker’s legal department and ran the CEO and chairman’s office. Yet Nada’s name rarely appears in company announcements, and photos of him are few and far between.
In recent weeks, however, the Malaysian-born, British-trained barrister has been center stage in the Tokyo trial of his other former boss, ex-Nissan director Greg Kelly, the American human resources executive whom prosecutors accuse of conspiring to hide Ghosn’s big compensation packages from public view in violation of Japanese law.
On the witness stand, Nada has been a portrait of conflict. On one hand, he delivered details of how Ghosn, Kelly and other executives allegedly skirted disclosure rules. On the other, Nada acknowledged under government immunity that he helped support the scheming.
On the surface, Nada represents a career of enforcing compliance to keep Nissan out of trouble. But his own actions helped trigger Ghosn’s downfall and unleash a crisis that still bedevils Japan’s No. 2 automaker and its alliance partner Renault.
Nada, 56, who finished testifying in court last week, offered his first public narrative for one of the most vexing questions about the entire saga: What made Nada turn on Ghosn?
His testimony is key not only for what it says about Ghosn and Kelly, but what it says about the corporate intrigue at Nissan and controversial talk of a merger with Renault.
A cunning corporate maneuverer who pulled strings behind the scenes, Nada depicted himself in court as being fed up with mounting misconduct by Ghosn and said he bargained to testify against the Renault-Nissan chief under immunity because he was worried about being ensnared in the same legal swoop.
Ghosn, who fled to Beirut to avoid being tried, has a different story. He says Nada was simply part of a Nissan cabal that framed the chairman in order to scuttle Ghosn’s plan to merge Renault and Nissan in an “irreversible” partnership.
Indeed, testimony in the Tokyo District Court indicates that Nada did want Ghosn gone long before the underling approached prosecutors for a plea bargain, and that the merger idea weighed on Nada’s mind.
Nada’s testimony is significant because it offers outside corroboration of Ghosn’s oft-repeated assertion that he was planning a merger of Renault and Nissan through what he envisioned as a holding company.
In February 2018, nine months before Ghosn would be arrested at Tokyo’s Haneda airport, Renault said it would renew his mandate to lead the global alliance for another four years, on the premise that he would make the partnership “irreversible.”
That triggered growing concerns in Nissan’s executive ranks, according to emails presented in court by Kelly’s defense team. For many of Nissan’s leaders, the idea of a merger with Renault was a non-starter.
That same month, Nissan’s then-CEO Hiroto Saikawa wrote an email to Nada expressing concern that Ghosn “may be pushed or forced to promise some road map to make a merger in French context in return for the support of his mandate and compensation.”
Nada wrote an email that month to his Nissan legal team, raising a concern that Renault was planning to consolidate Nissan into its earnings. He wrote: “There may be a train running in Renault for Renault to fully consolidate Nissan.”
In May 2018, Nada said he raised the issue of Ghosn’s alleged financial misconduct with two other Nissan executives. At that time, Nada testified, the organization was expecting Ghosn to retire the following year, in 2019. If so, Nada testified, that would speed up Ghosn’s plan to finally merge Nissan and Renault. Nada testified that he felt an urgency to take action.
“I knew he was going to retire,” Nada said in court. “I knew Mr. Ghosn was now talking about a merger. The merger is a consequence of Mr. Ghosn’s retirement. I was sure the plan we had been talking about all along was now about to be executed. …
“As a consequence of his retirement, in order for him to maintain control over the companies, he would merge the companies,” Nada said.
“I felt the train was about to leave the station, and it had to be stopped.”
In another email, sent one day before Ghosn’s Nov. 19, 2018, arrest, Nada seemed to suggest to Saikawa that Nissan should leverage the pending arrest to reframe the alliance with Renault, which held a controlling 43.4 percent stake in the Japanese automaker. In that email, Nada refers to Ghosn as “XXX.”
“Nissan’s position should be Mr. XXX’s wrongdoing and removal as a representative director at Nissan is a fundamental change to the circumstances of the alliance, and a new governance for the alliance must be found,” Nada wrote.
Listening to Nada tell his story to the presiding judge are Kelly and his legal team. Kelly, 64, was a Tennessee executive who rose through Nissan as Ghosn worked around the world to spur growth and prosperity for the automaker. The gist of the case is whether Ghosn, with Kelly’s help, conspired to keep millions of dollars in deferred compensation out of financial filings for fear that the public would disapprove.
Ghosn, too, would now be sitting in the courtroom with Kelly, but the former chairman jumped bail and fled Japan in December 2019 to avoid the trial.
Kelly’s defense has presented documents to show that the automaker was game-planning to remove Ghosn as early as May 2018. One email contained several flow charts done at Nada’s behest with different scenarios: One played out what would happen if Ghosn were dismissed by Renault; another imagined that Ghosn himself might want to resign; another imagined that Nissan ditched Ghosn.
In one of the charts, Nissan planned for an “actual conviction case” scenario, in which Ghosn would be arrested and convicted. The scenarios also imagined how it would play out if the chairman would be mentally incapacitated or bankrupt.
In court, Nada testified that in mid-2018, his strategy was to collect evidence against Ghosn, confront Ghosn at a board meeting and compel Ghosn to resign. If Ghosn refused to step down, the company then planned to turn over its findings to prosecutors, Nada testified.
But that plan became complicated.
When Nissan’s statutory auditor first approached prosecutors, Nada says he was spooked into cutting a plea bargain to testify against Ghosn.
“I recognized prosecutors at least knew Nissan was involved,” Nada said. “I was concerned my own involvement would be misunderstood. … I was involved in carrying out many of the things Mr. Ghosn was under investigation for. My involvement could be mischaracterized.”
A full picture of Nada is a complex composite of an executive saddled with potential conflicts of interest, stemming partly from his role as a plea bargainer. To Nada’s critics, including those inside the company, this undermined the very legitimacy of Nissan’s investigation of Ghosn.
Critics point out that Nada coordinated Nissan’s investigation for months after Ghosn’s arrest. He also commissioned Nissan’s outside counsel, Latham & Watkins, to help lead it. This posed potential conflicts because Nada had consulted the law firm on many of the very Ghosn compensation schemes that were now being probed by prosecutors.
Critics of Nissan’s investigation into Ghosn’s activity say that, among other problems is the fact that it didn’t include interviews with Ghosn or Kelly to hear their response to the full set of allegations.
Chief among the critics was Thierry Bollore, former Renault CEO, who spelled out his concerns in an Oct. 8, 2019, letter to Nissan’s board.
“How is it possible that Mr. Nada continues to hold a senior corporate officer position within Nissan?” Bollore asked in the letter, the contents of which were confirmed to Automotive News by a person who received it. “The credibility of the internal investigation as well as Nissan’s governance are potentially compromised by this.”
Bollore highlighted the sidelining of Ravinder Passi, Nissan’s then- global general counsel. Passi, too, had raised questions about the propriety of Nada’s role and other issues surrounding Nissan’s internal investigation in a September 2019 letter to independent directors.
“I believe that these matters create substantive concerns and that these issues will come to a head in due course and create exposure and risk for the company,” Passi wrote in the letter, which was published by Bloomberg News.
Three days after submitting the letter, Passi was sidelined from the probe. He was later abruptly told he would be transferred to Nissan’s U.K. operations — an effective demotion. Before leaving Japan for the U.K. in June 2020, his home was raided by people with court orders to seize his company computer and smartphone.
“After I had blown the whistle, I was subjected to significant acts of retaliation by Nissan,” Passi said in a statement to Automotive News. “These included me having a significant part of my role removed from me; being suspended without pay as a ‘disciplinary’ sanction.”
After Passi returned to Britain, he filed a complaint against the Nissan with the U.K. Employment Tribunal, claiming he is the victim of retaliation for his whistleblowing. He says he was subsequently terminated on Nov. 11 and then filed another complaint addressing further acts of retaliation to which he says he was subjected after filing the first claim.
Despite his front-row seat to the scandal, Nada is one of the last Ghosn-era executives to keep his job at Nissan, even amid an exodus of top brass that eventually included Saikawa. Nada was removed as head of legal only in October 2019 amid the outcry about conflicts of interest.
“Although Nissan has found no evidence of inappropriate involvement by Nada in the internal investigation into executive misconduct led by former Chairman Carlos Ghosn and others, the change is aimed to avoid undue suspicion and to enable him to focus on important tasks for the company, such as forthcoming legal action,” Nissan said at the time about Nada’s move.
Today, the prosecutor’s star witness remains a senior vice president at Nissan with a role of “adviser.”