Nissan says chairman Ghosn to be dismissed for misconduct

Lloyd Doyle
November 20, 2018

Ghosn, 64, and Representative Director Greg Kelly had been officially reporting lower compensation "to reduce the disclosed amount", Nissan said in a statement.

The firm said it has also uncovered evidence of other "significant acts of misconduct" by Ghosn.

Nissan's high-flying chairman Carlos Ghosn is to be dismissed after the Japanese auto giant said an internal investigation found he under-reported his income and engaged in other "significant misconduct".

Earlier in the day, Ghosn was questioned on a voluntary basis by prosecutors from the special investigation section of the Tokyo District Public Prosecutors Office, people close to the investigation said.

The astonishing news first emerged Monday evening, when the Asahi Shimbun newspaper reported Ghosn was being questioned by prosecutors and was likely to face arrest.

In Japanese business, the representative director role is the most senior executive managing role, reporting directly into the board of directors.

The automaker said CEO Hiroto Saikawa will promptly propose at a board meeting Thursday dismissing Ghosn as chairman and representative director, as well as representative director Greg Kelly who was also arrested on suspicion of violation of the financial law, at a board meeting.

He said the company had uncovered years of financial misconduct including under-reporting of income and inappropriate personal use of company assets.

Last year, Nissan sold 5.8 million vehicles, versus 3.8 million for Renault, and before this week its market capitalization was roughly three times that of Renault's.

It's a shock announcement for what had been seen as one of the key architects of Nissan's turnaround and the ongoing success of the Renault-Nissan-Mitsubishi Alliance.

Brazil-born Ghosn, a workaholic who turned up at the office at 7 am and left only at 11 pm, made sure the company earned profits in less than just two years after he joined it. Ghosn stepped down as Nissan chief executive and president in April but continued as its chairman.

In 2016, Ghosn also took charge at troubled Mitsubishi after Nissan threw it a lifeline, buying a one-third stake for about $2.2 billion as it wrestled with a mileage-cheating scandal that hammered sales. "We celebrate today the start of a new chapter of our company's life", Ghosn said in 2010.

"Nissan deeply apologizes for causing great concern to our shareholders and stakeholders", the company's statement said.

"We need to really look back at what happened, take it seriously and take fundamental countermeasures", he said. Mitsubishi and Renault have also not commented, neither has Ghosn's side. Ghosn guided the alliance to vie with Volkswagen Group and Toyota to be the world's biggest automaker by volume, selling more than 10 million vehicles globally under 10 different brands.

Ghosn was at Nissan for 19 years and signed a contract this year that would have run through 2022.

But he went on to add that the French state, as a Renault shareholder, "will be extremely vigilant to the stability of the alliance and the group".

For the past two decades, he has maintained an unusually high profile in a nation where foreign chief executives of major Japanese companies are still relatively rare.

Other reports by Iphone Fresh

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