Nissan ousts chairman Carlos Ghosn over financial misconduct ‘claims’

Anna Jefferson
November 20, 2018

Nissan says it will oust Renault CEO Carlos Ghosn "serious act of misconduct".

Nissan will propose dismissing Mr Ghosn and board member Greg Kelly, who was also arrested for financial misconduct, according to a statement from the company, which said a whistleblower set off a months-long investigation of the two men.

But the group now looks troubled after Japanese police reportedly arrested Ghosn on suspicion he failed to report his full compensation to stock market authorities as chairman of Nissan.

The news comes as a shock in Japan where Ghosn, a rare foreign top executive, had been well-regarded for turning Nissan around from near-bankruptcy.

Mr Ghosn, a towering figure in the auto industry, will be sacked from the Japanese firm after a board meeting on Thursday, its chief executive said.

Besides being chairman of Nissan, the 64-year-old is also CEO of Renault and leads the Nissan-Renault-Mitsubishi alliance.

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Nissan issued a statement Monday and said the executive has "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".

He has been accused of "significant acts of misconduct", including under-reporting his pay package and personal use of company assets.

In 2016, Mr Ghosn became Mitsubishi Motors' chairman. Management, including Saikawa, was strongly alarmed by moves for the two companies to completely integrate their management in keeping with the French government's intentions, and nervously watched every step Ghosn made. The executive earned about $9.7 million in fiscal 2016, but the following year reported his earnings declined 33 percent, NHK said.

"It's easy for a board to be alert when times are tough, but it's very important for a board to maintain their vigilance when times are good", she continues, adding that "sometimes boards can be deferential to an iconic CEO" such as Ghosn.

The company said it would brief reporters tonight, with Japanese media reporting this would take place at 9pm Tokyo time (1200 GMT/8pm Malaysian time) to provide details.

Ghosn's removal would deprive the manufacturer of a seasoned leader, and follow a number of surprise shakeups in the sector that have brought new CEOs to Volkswagen AG, VW's Audi brand, Daimler AG and Fiat Chrysler Automobiles.

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Ghosn also helped see Renault through the throes of the global financial crisis, getting help from the carmaker's biggest shareholder, the French state.

Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said the path forward remains unclear, as Ghosn may deny the allegations. The alleged misconduct was "totally unacceptable", Saikawa said.

The partnership between Nissan and Renault started in 1999.

The country owns around 15 percent of Renault, Nissan's partner, and supported Ghosn's renewal at the helm of the French automaker.

Ghosn stepped down as CEO of Nissan in 2017.

He served as Nissan chief executive from 2001 until April 2017, and also was named chief executive of Renault in 2005, leading the two major automakers at once.

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