I was shocked when I heard that the boss of Nissan, Carlos Ghosn, had been arrested this week. The company says he’s being investigated for “numerous significant acts of misconduct.”
I have interviewed Mr Ghosn several times for the BBC but of course, I did not have any reason to ask him questions about his salary or his spending habits.
According to NHK, Mr Ghosn used company money to buy luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam. NHK says they cost tens of millions of dollars and there was no legitimate business reason for him to buy them.
NHK also says that Mr Ghosn used hundreds of thousands of dollars for family trips and dining. When he was arrested on Monday, it was on suspicion of under-reporting his income by about 44 million dollars over a five year period.
The Managing Director of Intelligence Automotive Asia, Ashvin Chotai, expressed his shock on the BBC.
“If these allegations are true, there are appears to be a serious breach of Japanese financial laws. We are not talking about tax fraud,” said Mr Chotai.
“I have to say though, this is not the first time that a CEO of a Japanese company has been brought up on such a charge and in previous cases there haven’t been arrests. But there is more media and public interest in this case because Carlos Ghosn is a foreigner and a very high profile CEO,” Mr Chotai told the BBC.
There is a rumour that the actions again Mr Ghosn might be a coup by company insiders who were resentful of his big salary.
The Financial Times notes that in 2010 Mr Ghosn became the highest paying executive in a country where reminumeration tends to be much lower than global stands.
My Ghosn’s supporters could of course praise his special talents and insights – and the way he was able to turn the company around in the late Nineties.
He was also deeply involved in the running of the other companies in the automotive group, Renault and Mitsubishi.
Nevertheless, hard-working Japanese executives are often suspicious of rich foreigners working in their industries.
Does the money they receive really make them better at their job? Wouldn’t they understand the company better if they rose through the ranks, like ordinary Japanese managers?
Ashvin Chotai says: “It’s very different to imagine Nissan without Carlos Ghosn. I expect will see a new era going forward. From now on, it will probably be run more along the lines of other Japanese companies, such as Toyota.”