Report: Nissan stopped audit chief’s plan to expand misconduct probe

Immediately preceding Ghosn’s arrest in November 2018, Nissan issued a statement announcing it had been conducting an internal investigation over the past several months regarding misconduct involving Ghosn and representative director Greg Kelly. The internal investigation, sparked by a whistleblower report, revealed that “over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount in order to reduce the disclosed amount of Carlos Ghosn’s compensation,” Nissan said at the time. Ghosn was engaging in numerous other acts of misconduct as well, such as personal use of company assets.

In the latest development to come to light, Christina Murray, who was promoted to vice president of internal audit and compliance in April 2019 and who had been spearheading the internal investigation surrounding Ghosn before abruptly resigning last month, reportedly had compiled a list of roughly 80 Nissan employees believed to have assisted Ghosn or obstructed the investigation. Murray had further proposed to establish a “Committee on Employment Action and Remediation” and use the findings of the internal investigation to determine whether any disciplinary actions against other employees were appropriate, people familiar with the matter told The Wall Street Journal.

Murray said Nissan had shot down this plan, however, after one of the key people suspected of misconduct said establishing the committee was not necessary, according to an internal e-mail seen by the WSJ. According to Murray, the executive at the center of these allegations is Hari Nada, who oversees Nissan’s legal department.

Murray said in the e-mail she met with Yasuhiro Yamauchi, Nissan’s former chief operating officer and interim CEO, to ask him whether it was true plans for the proposed committee had been scratched. “He told me that Hari told him it was not necessary,” Murray wrote in the e-mail to her team and seen by the WSJ. “I cautioned him about following Hari on this, as Hari might have a reason to not want a decision-making committee to hear about certain misconduct.”

In September, Nissan published a summary of a report prepared by law firm Latham & Watkins, which confirmed allegations that several Nissan executives—including Ghosn and Kelly—were paid more than they were entitled. Nada reportedly told Yamauchi that “any disciplinary committee should rely on Latham’s report and other fact-finding documents,” rather than Murray’s list, arguing Murray’s list was too broad and “‘a complete mischaracterization of Latham’s findings,’” a person familiar with the discussions told the WSJ.

Nada is now under pressure to resign. A board meeting to be held Oct. 8 may determine his fate.