Nissan ousts chairman and Renault CEO Ghosn on financial violations

Andrew Cummings
November 19, 2018

The drop in shares was sparked after Japanese newspaper The Asahi reported Mr Ghosn, who is also chairman of Nissan, could face arrest on suspicion of under-reporting his salary.

Nissan's Carlos Ghosn, one of the auto industry's star executives, now faces dismissal by the Japanese vehicle maker, and has been arrested.

Ghosn was also arrested Monday after he voluntarily submitted to questioning by Tokyo prosecutors, Japanese broadcaster NHK reported, though prosecutors did not confirm the move. While no longer Nissan's chief executive officer, he's been laying the groundwork as chairman to make the alliance permanent after his departure - including the possibility of a merger.

Nissan ousts chairman and Renault CEO Ghosn on financial violations

On Monday, Nissan said Ghosn (pronounced "Go-n") used company money for personal use.

Nicknamed Le Cost Killer, Brazil-born Ghosn, 64, is known for overhauling Renault and Nissan starting in the nineties.

Greg Kelly, a Nissan representative director, is also accused of under-reporting his income and was "deeply involved" in the misconduct.

Following an internal investigation conducted after a whistle-blower claimed that he under-reported salary, Nissan to remove Ghosn from position.

In a statement released, Nissan 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".

"Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation". He said in September that he will continue to pare back his roles at the three individual companies, while continuing to head their alliance.

Renault's shares, listed in Paris, plummeted after Nissan confirmed reports of its chairman's alleged misconduct. He has been chairman of Mitsubishi since 2016, when Nissan acquired a stake in that firm. Since 1999 Nissan has been part of the Renault-Nissan-Mitsubishi Alliance.

Among the best paid executives in both Japan and France for several years, Ghosn's compensation has regularly drawn criticism.

A spokesman for France's finance ministry declined to comment on the news. But plans for an orderly succession - and potentially the entire future of the rather unwieldy Renault-Nissan-Mitsubishi structure - may well have been thrown wide open. He took home about $8.5 million at Renault and about $2 million from Mitsubishi in the latest period. In addition to this, he received €9.2m in his final year as Nissan chief executive.

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