Japanese automaker Nissan has dismissed Carlos Ghosn from his chairman role, following his arrest by prosecutors in Japan for engaging in financial misconduct.
On Nov. 19, Japan’s NHK public television reported that Ghosn was arrested in Tokyo on suspicions that he violated Japanese financial laws. Immediately preceding his arrest, Nissan issued a statement announcing that it had been conducting an internal investigation “over the past several months” regarding misconduct involving Ghosn and representative director Greg Kelly.
The internal investigation, sparked by a whistleblower report, revealed 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 stated.
Concerning Ghosn, “numerous other significant acts of misconduct have been uncovered, such as personal use of company assets,” Nissan added. “Kelly’s deep involvement has also been confirmed.” Both Ghosn and Kelly will be removed from the board.
“This is an act that cannot be tolerated by the company,” Nissan CEO Hiroto Saikawa said at a news conference. “This is serious misconduct.” Saikawa commented that the problems may have happened because one person had too much power.
In a prepared statement, Nissan said it “will continue our work to identify our governance and compliance issues and to take appropriate measures.” It further added that the company has been providing information to the Japanese Public Prosecutors Office and has been “fully cooperating with their investigation” and “will continue to do so.”
Ghosn’s arrest has put the structure of the auto industry’s largest global alliance between Renault, Nissan, and Mitsubishi into a tailspin. In a statement, however, French carmaker Renault said that Philippe Lagayette, lead independent director of Renault, in liaison with board committee chairs Marie-Annick Darmaillac and Patrick Thomas, “have acknowledged” Nissan’s announcement and they “wish to express their dedication to the defense of Renault’s interest in the alliance.” Renault added that its board will convene “very shortly.”
Moreover, French President Emmanuel Macron during a press conference said the French government “will be extremely vigilant about the stability of the alliance.” The French government has a 15 percent ownership stake in Renault.