Going, Going, Ghosn Fired As Nissan Chairman
Nissan's board on Thursday fired Carlos Ghosn as chairman and representative director, ousting the main architect of the automaker's alliance with France's Renault and Japanese peer Mitsubishi Motors, and ushering in a period of uncertainty for the company's 19-year alliance with Renault. The decision came in response to Ghosn's arrest in Tokyo on Monday. Representative director Greg Kelly, a close Ghosn aide, was also voted out.
Nissan executives have five seats on the nine-member board, Renault loyalists have two seats and the remaining two are held by unaffiliated outside directors, a former bureaucrat and a race driver.
Renault has refrained from firing Ghosn as chairman and CEO, although he remains in detention along with Kelly, whom Nissan also accuses of financial misconduct. But Mitsubishi Motors plans to remove Ghosn from his post of chairman at a board meeting next week.
The legendary executive, who led Nissan in various capacities since 2000, faces allegations of understating his income by 5 billion yen ($44 million) over five years, starting in fiscal 2010, diverting investment money for personal use and misusing company funds. Over 10 Nissan executives have voluntarily agreed to answer prosecutors' questions, including Saikawa and former Chief Operating Officer Toshiyuki Shiga, also a board member.
The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors has been rattled to its core by Ghosn’s arrest in Japan on Monday, with the 64-year-old group chairman accused of financial misconduct. Ghosn had shaped the relationship and was pushing for a deeper tie-up, including potentially a full Renault-Nissan merger at the French government’s urging, despite strong reservations at the Japanese firm.
As Nissan scrambles to contain the scandal and strengthen its governance, the board decided to establish an independent advisory committee made up of lawyers and outside experts. The panel is expected to not only investigate Ghosn's alleged misconduct but also consider ways to prevent similar behavior and review executive compensation.
Amid growing uncertainty over the future of the alliance, Japan’s industry minister and France’s finance minister are due to meet in Paris on Thursday to seek ways to stabilise it.
“For me, the future of the alliance is the bigger deal,” a senior Nissan official told reporters on Wednesday, when asked about Ghosn’s arrest. “It’s obvious that in this age, we need to do things together. To part would be impossible.”
-
-
*
-
Japanese prosecutors said Ghosn and Representative Director Greg Kelly, who has also been arrested, conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen ($88 million). Shin Kukimoto, deputy public prosecutor at the Tokyo District Public Prosecutors Office, said on Thursday that court approval was received a day earlier to detain Ghosn for 10 days but he could not comment on whether he had admitted to the allegations.
Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Ghosn engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.
The Asahi Shimbun said on Thursday that Ghosn had given Kelly orders by email to make false statements on his remuneration. Tokyo prosecutors likely seized the related emails and may use them as evidence, the report said.
Separately, The Yomiuri, Japan’s biggest-circulation daily, cited unnamed sources as saying Nissan’s internal investigation found that Ghosn had since 2002 instructed that about $100,000 a year be paid to his elder sister as remuneration for a non-existent advisory role. The paper said Nissan had found through the investigation that Ghosn’s sister had in fact been living in and managing a luxury apartment in Rio de Janeiro that the company had bought through an overseas subsidiary, but had done no advisory work for the car maker. Nissan has shared the information with prosecutors, Yomiuri said.
-
-
*
-
Prosecutors said Ghosn is being held at the Tokyo detention centre, which is known for its austere regime, a far cry from his usual luxury lifestyle, including restrictions on sleeping during the day and a requirement to wear a mask when meeting with visitors to prevent the spread of disease.
The detention house “is pretty cold at this of time year,” internet entrepreneur and convicted fraudster Takufumi Horie told his followers on Twitter, according to Reuters. Motonari Otsuru, a former public prosecutor who is known for overseeing the case against Horie, was hired as Ghosn’s lawyer, NHK reported.
https://www.zerohedge.com/news/2018-11-22/going-going-ghosn-fired-nissan-chairman