Nissan sacks chairman Ghosn over cash scandal

VIDEO: REUTERS
An investigation by Nissan shows Mr Carlos Ghosn had been engaged in wrongdoing including under-reporting of his earnings.
An investigation by Nissan shows Mr Carlos Ghosn had been engaged in wrongdoing including under-reporting of his earnings.

Move follows arrest of Ghosn and leads to uncertainty over Japanese car maker's tie-up with Renault

YOKOHAMA/PARIS • Nissan Motor's board yesterday voted unanimously to oust chairman Carlos Ghosn after the shock arrest of the industry heavyweight, ushering in a period of uncertainty for its 19-year alliance with Renault.

The Japanese company said its board also voted to remove Mr Greg Kelly - who like Mr Ghosn has been arrested after allegations of financial misconduct - from his post as representative director.

The decision, which leaves the chairman position vacant, came despite Renault urging Nissan's board before its meeting to delay removing Mr Ghosn, sources said.

Renault had asked the directors to instead appoint an interim chairman, according to people familiar with the matter, which Nissan stopped short of doing.

The Franco-Japanese alliance, enlarged in 2016 to include Mitsubishi Motors, has been rattled to its core by the arrest of Mr Ghosn in Japan on Monday.

The 64-year-old had shaped the alliance and was pushing for a deeper tie-up, including potentially a full Renault-Nissan merger at the French government's urging, despite strong reservations at the Japanese firm.

Nissan also sought to assuage investor concerns over the drama that has shaken the company since Mr Ghosn's arrest, saying its alliance with Renault remained unchanged.

Japanese prosecutors said Mr Ghosn and Mr Kelly conspired to understate Mr Ghosn's compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen (S$122 million).

Deputy public prosecutor Shin Kukimoto from the Tokyo District Public Prosecutors Office yesterday said that court approval had been received a day earlier to detain Mr Ghosn for 10 days.

Renault has refrained from firing Mr Ghosn as chairman and chief executive, but Mitsubishi plans to remove Mr Ghosn from his post.

 
 
 
 

Amid growing uncertainty over the alliance's future, Japan's Industry Minister and France's Finance Minister were to meet in Paris yesterday to seek ways to stabilise it.

Nissan said on Monday that an internal investigation triggered by a tip-off from an informant revealed that Mr Ghosn had engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.

The Asahi Shimbun, quoting unnamed sources, yesterday said Mr Ghosn had given Mr Kelly orders by e-mail to make false statements on his remuneration.

Tokyo prosecutors likely seized the related e-mails.

The Yomiuri Shimbun, Japan's biggest-circulation daily, cited unnamed sources as saying Nissan's internal investigation found that Mr Ghosn had since 2002 instructed that about US$100,000 a year be paid to his elder sister as remuneration for a non-existent advisory role.

The paper said Nissan found that Mr Ghosn's sister had been living in a luxury flat in Rio de Janeiro that the company had bought through an overseas unit, but had done no advisory work for the car maker.

Prosecutors said Mr Ghosn is being held at the Tokyo detention centre which is known for its austere regime, including curbs on sleeping in the day and a requirement to wear a mask when meeting visitors to prevent the spread of disease.

Shares in Nissan closed up 0.8 per cent yesterday, in line with a broader market, ahead of the board meeting.

REUTERS, BLOOMBERG

 
A version of this article appeared in the print edition of The Straits Times on November 23, 2018, with the headline 'Nissan sacks chairman Ghosn over cash scandal'. Print Edition | Subscribe