Carlos Ghosn, the globe-straddling executive behind the Renault-Nissan Alliance and the resurrection of Mitsubishi Motors, has reportedly been arrested in Japan following a whistleblower-prompted investigation into financial irregularities.
In a statement, Nissan said Ghosn and board director Greg Kelly allegedly violated Japanese financial laws by under-reporting compensation levels for years, all part of an apparent plot to hide Ghosn’s actual level of compensation. The automaker will move to remove Ghosn, thus ending a long and successful era of governance.
Nissan’s statement follows:
Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company’s Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly.
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.
Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. We will continue to do so.
As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan’s Chief Executive Officer Hiroto Saikawa will propose to the Nissan Board of Directors to promptly remove Ghosn from his positions as Chairman and Representative Director. Saikawa will also propose the removal of Greg Kelly from his position as Representative Director.
Nissan deeply apologizes 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.
Nissan claimed it will update the media at 9 p.m. Monday, Tokyo time. Ghosn, 64, was reported arrested by Japanese media, though whether this has actually happened remains unclear. According to Reuters, citing Japan’s Asahi newspaper, prosecutors have beguin searching Nissan’s corporate headquarters.
A shrewd and determined executive, Ghosn was instrumental in bringing together Renault and Nissan in 1999, serving as chairman and CEO of both automakers and taking on the chairman role at Mitsubishi after that company joined the alliance two years ago. He has since relinquished his role as Nissan CEO.
During his tenure, aggressive streamlining and platform and technology sharing propelled the alliance members to new heights, both in terms of sales and profits. Renault-Nissan-Mitsubishi was the world’s largest automaker in the first half of 2018, beating Volkswagen Group. In the wake of the revelations, Renault shares fell 13 percent in Paris as Nissan securities fell 11 percent in Germany, pointing to the importance of Ghosn’s grip on the two companies.
Ghosn’s Renault pay package amounted to a shareholder-approved 7.4 million euro last fiscal year ($8.46 million), with Nissan and Mitsubishi chipping in $6.52 million and $2.01 million, respectively.
[Source: CNBC] [Image: Nissan]