Photo/IllutrationNissan Motor Co. Chairman Carlos Ghosn poses with a Datsun Go car at an unveiling event in India in July 2013. (Asahi Shimbun file photo)

  • Photo/Illustraion

Former Nissan Motor Co. Chairman Carlos Ghosn used his influence to have the automaker select a distributor in India and land for a factory in Brazil apparently due to personal ties, a source within the company said.

The carmaker is investigating its contracts in Japan and elsewhere for possibilities that Ghosn mixed business with personal connections when it made investments and payments under the name of company operations.

When Nissan was looking for a distributor in India in 2008 to bolster its sales in India, it inked a deal with Hover Automotive India Ltd. for it to become Nissan’s exclusive agent after Ghosn strongly pushed it, the source said.

Hover was effectively owned by a man whose daughter is a close friend of Ghosn’s oldest daughter.

Ghosn’s family formed close ties with the man’s family through the association of their daughters, who were attending the same school.

Nissan had a specific company in mind as its prospective distributor in India based on information it gathered from local financial specialists and was close to finalizing the selection, the source said.

But Hover was selected at the last minute at the behest of Ghosn despite no prior experience in automotive distribution. Its name was not even floated during the selection process.

The de facto owner of Hover hired a former car dealer from one of Nissan’s rivals, but the business did not go well.

Hover reached its domestic sales target its first year in 2010.

But it attained 80 percent of the goal in its second year and only 60 percent in the third year.

Hover plunged into serious financial difficulties and continued falling. Ghosn, in an attempt to salvage the venture, engineered a plan for Nissan to take over the struggling company for about $60 million (about 6.8 billion yen).

But Nissan finally terminated its contract with Hover in 2014 as other Nissan executives did not approve of Ghosn’s proposal.

Hover filed a lawsuit against Nissan for ending its contract on short notice.

The carmaker paid about $12 million in damages to the Indian company.

Meanwhile, Nissan’s factory in Resende in Brazil’s Rio de Janeiro state opened in 2014 on land owned by a friend of the state’s former governor.

Ghosn was a friend of the former governor.

Ghosn, who is of Lebanese descent, was born in Brazil and spent his childhood there before he moved to Lebanon.

Nissan officials said they were puzzled by the company’s selection of Resende as it was 160 kilometers inland from Rio.

“The location is not good for exports and takes more distribution costs,” one Nissan official said.

The ex-governor who referred the land to Nissan has been under arrest on allegations of corruption by Brazilian authorities.

Nissan is investigating its buying procedures for the land over any irregularities in the contract.

The company is also scrutinizing procedures of other deals for possible mixing of business with personal affairs.

Nissan executives could be held accountable for their approval of shady deals involving important matters such as the construction of a new factory.

Ghosn was indicted this month for under-reporting about 5 billion yen in compensation from fiscal 2010 to fiscal 2014 in the company’s annual financial statements in violation of Financial Instruments and Exchange Law.