Japanese firm's board ousts long-time leader following his arrest in Japan – in contrast to the actions of alliance partner Renault
James Attwood, digital editor
22 November 2018

Nissan’s board of directors has voted to dismiss Carlos Ghosn from his role as chairman, following his arrest in Japan on suspicion of financial misconduct.

The decision, announced following an emergency meeting of the board on Thursday, came after Ghosn’s arrest in Japan based on information gathered during an internal investigation at Nissan.

Nissan to oust Carlos Ghosn due to 'serious misconduct'

The suspicions relate to Ghosn’s conduct at Nissan, and include under-reporting his salary and other misconduct charges, reportedly related to a string of properties purchased for his private use with Nissan funds. According to Japanese prosecutors, the activities Ghosn is suspected of would, if true, constitute a “heavy crime”.

As well as the decision to “discharge” Ghosn, Nissan’s board also dismissed representative director Greg Kelly for his involvement. The board also announced it was creating a special committee of independent directors to look at its management structure, with a separate committee tasked with proposing replacements for Ghosn and Kelly. Current Nissan CEO Hiroto Saikawa has been tipped to take on the role.

Nissan’s decision to dismiss Ghosn is at odds with the approach of Renault, its part-owner and major partner in the Renault-Nissan-Mitsubishi Alliance. On Tuesday, the French firm’s board elected to keep Ghosn in place as its chairman and CEO – instead making a series of 'transitional governance measures'. It has also asked alliance partner Nissan to share the information gathered by the Japanese firm's internal investigation.

That could put a strain on the alliance partnership, with reports implying that key figures within Nissan were involved in reporting the crimes to Japanese prosecutors to stop the Ghosn-led effort for Renault to take full control of the Japanese firm.

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Nissan’s statement about Ghosn and Kelly’s dismissal noted: “the board confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimise the potential impact and confusion on the day-to-day cooperation among the Alliance partners.”

Meanwhile, a representative of the Tokyo District Public Prosecutors Office has told reporters in Japan that Ghosn is being held at the Tokyo Detention Centre, and that courts have approved for his detention to be extended by another 10 days. 

Renault asks Nissan for evidence

The Renault board meeting on Tuesday was chaired by Renault's lead independent director, Philippe Lagayette. In a statement following the meeting, Renault said it had "adopted transitional governance measures to preserve the interests of the Group and the continuity of its operations."

Lagayette will continue to chair the board meetings, while Thierry Bolloré, Renault's chief operating officer, has been named deputy chief executive officer and will take on day-to-day management of the firm, with "the same powers" as Ghosn.

The statement also said: "At this stage, the Board is unable to comment on the evidence seemingly gathered against Mr Ghosn by Nissan and the Japanese judicial authorities. Mr Ghosn, temporarily incapacitated, remains Chairman and Chief Executive Officer."

Renault said the board will hold regular meetings while the investigation against Ghosn is ongoing, to "protect the interests of Renault and the sustainability of the Alliance." The statement continued: "The Board decided to request Nissan, on the basis of the principles of transparence, trust and mutual respect set forth in the Alliance Charter, to provide all information in their possession arising from the internal investigations related to Mr Ghosn."

Renault's decision not to strip Ghosn of his duties puts it at odds with Nissan - which Renault owns a stake in – and follows Nissan CEO Hiroto Saikawa saying he felt "despair, indignation and resentment" as Ghosn's alleged actions. Saikawa did say that Nissan was committed to the Renault-Nissan-Mitsubishi Alliance, and that was echoed in Renault's statement.

The statement concluded: "The Board endorsed the support expressed by the Nissan management to the Renault Nissan Mitsubishi Alliance, which remains the priority of the Group."

Ghosn has worked for Renault since 1996, and has been its chairman and CEO since 2005.

What Ghosn and Kelly are suspected of

Following Ghosn and Kelly’s arrests, which were based in part on evidence gathered in a Nissan internal investigation, details have begun to emerge on some of the alleged financial transgressions the pair are suspected of.

Ghosn is suspected of having under-reported his salary to Japanese authorities by a total of around £34 million over the course of five years. Japanese broadcaster NHK has also reported that Nissan spent millions buying luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam for his personal use. There have also been reports that he charged travel expenses for family vacations.

Public broadcaster NHK has also reported that Ghosn is suspected of directly instructing an aide to make a £1.2 million payment from Nissan funds to remodel his home in Lebanon.

Under Japanese law, tGhosn and Kelly can be kept in custody for up to 23 days without charge. Filing financial reports containing fake statements carries a penalty of up to 10 years in prison, along with a fine of up to 10 million yen (£70,000).

Read more

Nissan to oust Carlos Ghosn due to 'serious misconduct'

Opinion: taking stock of Nissan's claims against Carlos Ghosn

March 2018: Renault and Nissan could merge to become one company, says report

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23 November 2018

You could buy most of Lebanon for 1.2 million pounds!

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