Ghosn faces Mitsubishi sack as more allegations surface

Mitsubishi Motors Corp said on Monday its board removed Carlos Ghosn from his role as chairman, following his arrest and ouster from alliance partner Nissan Motor Co last week for alleged financial misconduct.
Former Nissan chairman Carlos Ghosn began his second week in a Japanese detention centre after allegations surfaced that he under-reported his salary.
Former Nissan chairman Carlos Ghosn began his second week in a Japanese detention centre after allegations surfaced that he under-reported his salary.PHOTO: AFP

TOKYO (AFP) - Top executives from Mitsubishi Motors are expected to gather on Monday (Nov 26) to sack Mr Carlos Ghosn as chairman over alleged financial misconduct that the once-revered tycoon denies, as further allegations leaked out against him.

At an emergency meeting in Tokyo, "it is to be proposed to the board of directors to promptly remove Ghosn from his position as... chairman", said the Japanese firm, the third company in the powerful alliance also involving Nissan and Renault.

Following his stunning arrest last Monday, the 64-year-old Brazil-born Frenchman began his second week in a Japanese detention centre facing allegations that he under-reported his salary to the tune of US$44 million (S$60.4 million) over several years.

He has not been formally charged and denies the allegations, telling prosecutors he had no intention of under-declaring his compensation.

Fellow executive Greg Kelly, described as the mastermind behind the alleged misconduct, has also reportedly denied the allegations, stressing that his boss's compensation was paid in an appropriate fashion.

The board of Nissan decided unanimously on Thursday to oust Mr Ghosn as chairman, a spectacular fall from grace for the dynamic businessman credited with turning around the firm's once-flagging fortunes by tying its fate to Renault.

The executives made their decision "based on the copious amount and compelling nature of the evidence of misconduct presented", said a company spokesman.

 
 
 

According to local media, Nissan formed a "secret" cell within the firm to look into the alleged financial misdeed.

Executives accelerated the probe amid concerns Mr Ghosn was working on a fully fledged merger between Nissan and Renault, Kyodo News said, without naming its sources.

Renault is the dominant partner in the alliance, holding 43 per cent of the shares in Nissan, but the Japanese firm outsells its French counterpart - sparking concern in Tokyo about the balance of power.

Together, the three-way alliance is the world's top-selling car company, with some 10.6 million vehicles rolling off the production line. It employs around 450,000 people worldwide.

Renault, which is 15 per cent owned by the French state, has decided to stick by Mr Ghosn for now, appointing an interim boss while the current CEO and chairman is "incapacitated".

'CONSPIRACY THEORY'

France's Economy Minister Bruno Le Maire has urged the Japanese firm to share "quickly" whatever evidence it has gathered and stressed that Mr Ghosn will stay at the helm of Renault "until there are tangible charges".

However, Mr Le Maire also said, "I do not believe in a conspiracy theory", amid talk of a so-called "palace coup" within Nissan to prevent Mr Ghosn merging the firm with Renault.

Nissan CEO Hiroto Saikawa spoke to staff on Monday to address the issue. Mr Saikawa, who rose through the Nissan ranks under Mr Ghosn's wing, has already spoken of his "great resentment and dismay" at the allegations.

Meanwhile, further claims continued to leak out in the Japanese media of Mr Ghosn's alleged misconduct.

Officially, prosecutors are looking into allegations that he under-stated his income by around five billion yen (S$60.7 million) between June 2011 and June 2015.

But the Asahi Shimbun said the authorities are planning to re-arrest him on charges of under-stating his income by a further three billion yen for the following three fiscal years.

Under Japanese law, suspects can face additional arrest warrants, which can result in heavier penalties. The current allegations could see Mr Ghosn facing 10 years behind bars and/or a 10 million yen fine.

Separately, Kyodo has reported that Nissan paid US$100,000 annually since 2002 to Mr Ghosn's sister for a fictive "advisory" role.

And the Mainichi Shimbun reported on Monday that Mr Ghosn used Nissan's corporate money to pay a donation to his daughter's university, and also charged family trips to the company.