Nissan Chairman Faces Arrest In Japan

Nissan Leaf The electric car for everyone

Nissan Leaf The electric car for everyone

In a statement, Nissan said it had been investigating Ghosn and Kelly for months, after receiving a report from a whistleblower.

The executive compensation Ghosn received in fiscal 2017 totaled about ¥1.9 billion ($16.9 million) - about ¥700 million from Nissan; about ¥900 million from Renault, where he also serves as CEO; and about ¥200 million from Mitsubishi Motors as its chairman.

Nissan Motors said Monday it was moving to dismiss chairman Carlos Ghosn after uncovering "significant acts of misconduct", including underreporting his own salary and using company assets for his personal benefit.

According to reports for Japanese media outlets NHK and Kyodo News, Ghosn allegedly reported only half of the $US88.7 million he earned in a five year period ending in March 2015.

Karen Brenner, clinical professor of business at New York University Stern School of Business, says the Ghosn situation shows that "boards have to be really alert, especially in good times".

Ghosn gave up his role as CEO of Nissan last year and has said that he may step down as CEO of Renault before his four-year term ends in 2022, fuelling speculation the alliance could lose its architect and main leader of the past two decades.

The revelation came after Nissan said Monday in a statement it has found "significant acts of misconduct" by Ghosn, such as "personal use of company assets". Both men could face charges in Japan.

At a press conference on Monday, the Nissan CEO said he felt "despair, indignation, and resentment".

Ghosn became a nemesis of French unions and left-wing politicians, who saw him as a symbol of capitalism's excesses, particularly its rich executive pay packages.

Ghosn's arrest will undoubtedly shake up the auto industry, in which he has been a key vocal player for 40 years.

5 killed as 3 California wildfires destroy thousands of structures, force evacuations
Millions of Californians remain under a "red flag" warning for conditions both ripe for fires and unhealthy air conditions. The Chico Fire Department said: "Firefighters continue to actively engage the fire in order to protect life and property".

Ghosn's alleged improprieties also raise questions over governance at the alliance in which the three partners' boards are all chaired by a single executive.

While there could be some scrutiny of the relationships between the companies, they're so intertwined now that cutting them apart would be hard, said Kelley Blue Book analyst Michelle Krebs.

The news is the latest scandal to sully Nissan's brand.

When the top of Renault is concurrently serving as the top of Nissan with 43 percent of shares, one person has too much authority and that was the problem.

CEO Hiroto Saikawa will propose to Nissan's board of directors to "promptly remove Ghosn from his positions as chairman and representative director", the company said.

Nissan shares fell to a two-year low of 940 yen before closing down 5.5 percent at 950 yen.

Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said the path forward remains unclear, as Ghosn may deny the allegations.

"Carlos Ghosn is no longer in a position capable of leading Renault", Le Maire told France Info radio.

Ghosn's name became well known in 1999 when he was sent from Renault to financially troubled Nissan as its chief operating officer. French President Emmanuel Macron said the country would work to preserve the stability of Renault and its alliance with Nissan.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.