Nissan chairman Ghosn arrested over serious misconduct claim
Carlos Ghosn, arguably the best-known figure in the car sector, hits the skids at Nissan amid a series of financial allegations.
Monday 19 November 2018 17:09, UK
Nissan is on the verge of sacking its chairman Carlos Ghosn after he was arrested amid a series of allegations including that he under-reported his income "over many years".
The Japanese carmaker, which owns the UK's largest car factory, in Sunderland, said its board would vote to remove him at a meeting scheduled for Thursday.
It called in the authorities after allegations raised by a whistleblower also led auditors to uncover alleged use of the business's money for personal purposes.
Nissan chief executive Hiroto Saikawa told a late-night news conference that the wrongdoing was serious and had been going on for years.
He said: "To have so greatly violated the trust of many, I feel full of disappointment and regret.
"It's not just disappointment, but a stronger feeling of outrage and, for me, despondency."
Mr Ghosn, who is also chief executive and chairman of Renault, was detained in Tokyo.
Renault shares hit their lowest level in more than four years on news of the scandal - down almost 15% at one stage.
They partially recovered later but were still 8% down at the close in Paris.
Trading in Nissan shares had already ceased for the day.
Nissan said it had been examining Mr Ghosn's reporting of his pay and bonuses for several months and the actions of another director, Greg Kelly who, the company added, was also arrested.
Its statement said: "The investigation showed 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.
"Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly's deep involvement has also been confirmed."
Neither Mr Ghosn or Mr Kelly - an American - commented on the allegations before they were taken into custody.
According to the Jiji news agency it involved the alleged under-reporting of almost 10 billion yen (£69m) by Mr Ghosn as five billion yen over five years from 2011.
The executive - seen by many observers as the most powerful person in the automotive industry - is known in the sector as 'Le Cost Killer'.
It is a reference to his reputation for saving struggling businesses.
He currently oversees the alliance involving Nissan, Renault and Mitsubishi and has led recoveries at all three brands.
Mr Ghosn, who was born in Brazil, made his name after taking the top job at Nissan in 2001 and was credited with leading its fightback from near bankruptcy.
Mr Saikawa said the affair would not affect the Japanese automaker's relationship with Renault and Mitsubishi.
But he hinted at a wider shake-up when he said too much power had been concentrated in one person - Mr Ghosn.
"Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures," the company said.
The French government holds a 15% stake in Renault.
President Emmanuel Macron told reporters: "It's too early to comment on the reality or materiality of the accusations, about which I have no further information.
"As a shareholder, however, the French government will remain extremely vigilant regarding the stability of the alliance, the (Renault) group and... its employees, who have the full support of the state."
Ana Nicholls, analyst at the Economist Intelligence Unit, said of the developments: "The ousting of Carlos Ghosn is not only shocking in itself, but it also brings to a head a question that has long hung over the alliance - how it will survive his departure.
"The strong bond between the French and Japanese carmakers depends partly on cross-shareholdings but even more on Ghosn's huge personal influence."