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Nissan says chairman Ghosn to be dismissed for misconduct

20 November, 2018, 16:59 | Author: Sara Gill
  • Renault shares PLUNGE as chief Carlos Ghosn 'faces arrest in Japan'

VideoNissan said it's recommending that the board fire its chairman, Carlos Ghosn, after authorities arrested him for alleged financial misconduct.

Nissan Motor Co. said Monday that it will dismiss its chairman, Brazilian-born Carlos Ghosn after finding that he under-reported his income "over many years", among other allegations of misconduct.

The news of Ghosn's downfall emerged unexpectedly on Monday evening, with local media first reporting he was being questioned by prosecutors and that Nissan's headquarters was being raided.

Nissan confirmed in a statement that Ghosn under-reported compensation "over many years".

Ousting the 64-year-old executive from Nissan is bound to raise questions about the future of a three-way auto alliance between Nissan, Renault and Mitsubishi, which Ghosn had personally shaped and pledged to consolidate with a deeper tie-up.

YOKOHAMA, Japan - 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 company said its internal investigation also found Ghosn had used company assets for personal purposes.

A statement by Philippe Lagayette, lead independent director of Renault, along with Renault Board Committee Chairs Marie-Annick Darmaillac and Patrick Thomas, said the three "wish to express their dedication to the defense of Renault's interest in the Alliance".

Nissan said it was providing information to the prosecutors and cooperating with their investigation.

However, there are no entries regarding Ghosn's income that include the purchases of foreign homes as being part of his remuneration.

Company officials have said the firms have been increasingly enjoying the benefits of the partnership, with the cost-saving synergy logging a record €5.7 billion (about ¥730 billion) in fiscal 2017.

A Nissan technician inspects the grill of a new 2016 Altima on the assembly line at the Nissan Canton Vehicle Assembly Plant in the US.

The country owns around 15 percent of Renault, Nissan's partner, and supported Ghosn's renewal at the helm of the French automaker.

Renault shares plunged almost 5% on the shock news.

Saikawa said the scandal was a "negative outcome of the long regime of Mr Ghosn". "On Thursday, I will call a board meeting to make a proposal to remove him from the position of chairmanship, and approve it", said Saikawa.

In his 40 years in the auto industry, the praise Carlos Ghosn has won for turning around businesses has regularly been matched by criticism over the amount he has been paid to do it.

Renault came to the rescue of the then-ailing Japanese automaker in 1999 and parachuted in Ghosn, who set about slashing costs and jobs in a huge corporate overhaul.

"I have to say that this is a dark side of the Ghosn era which lasted for a long time", Mr Hiroto said adding he was still thinking through whether Mr Ghosn was "a charismatic figure or a tyrant". "Looking back, after 2005 when he became CEO [chief executive] of both Renault and Nissan, we did not really discuss the implications", he said.



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