Carlos Ghosn is set to be removed from his role as Nissan chairman and representative director after an internal investigation found that he has under-reported his salary to Japanese authorities. The firm said it has also uncovered evidence of other "significant acts of misconduct" by Ghosn.
Nissan said the misconduct, which involved both Ghosn and fellow representative director Greg Kelly, came to light following a whistleblower report, prompting an internal investigation that has been ongoing for several months. In Japanese business, the representative director role is the most senior executive managing role, reporting directly into the board of directors.
According to Japanese news agency Kyodo, Ghosn is believed to have understated his income by 5 billion yen over five years, a total of around £34 million.
In a press conference, Nissan CEO Hiroto Saikawa confirmed that both Ghosn and Kelly has been arrested by authorities. He said that it was his priority to minimise the impact on Nissan and its employees, and that the board would also look at ways of preventing such issues occuring in the future.
During the conference, Sakawa said he was unable to give full details of the acts of misconduct, but said: "It’s very difficult to express it in words. Beyond being sorry, I feel big disappointment and frustration and despair. I feel despair, indignation and resentment. As the details are disclosed, I believe people will feel the same way that I feel today."
Saikawa said the board would meet on Thursday to remove both men from their roles and discuss future plans. He said that 'independent directors' would join the Nissan board going forward, and a committee led by independent directors would be established to look at how to prevent such issues in the future.
As well as his role with Nissan, Ghosn is the chairman of the Renault-Nissan-Mitsubishi Alliance, which encompasses ten brands and is one of the world's three largest car groups.
Saikawa said that the Alliance would not be affected by the move – despite the fact Ghosn currently remains chairman and CEO of Renault. "The partnership among the three entities will not be affected by this event," said Saikawa. "We will work closely with Alliance partners to minimise the impact on Alliance efforts."
Nissan: invesigation sparked by whistleblower report
In a statement confirming the news, Nissan said: “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 Ghosn’s compensation.
“Also, in regard 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 prosecutor's office and has been fully cooperating with their investigation. We will continue to do so.”
Nissan said that, because the misconduct “constitutes clear violations of the duty of care as directors”, CEO Hiroto Saikawa will propose that the company’s board of directors promptly remove both Ghosn and Kelly from their roles with the company.