Nissan's Ghosn accused of false income reports, faces arrest

Daniel Fowler
November 20, 2018

Earlier today, ( Carlos Ghosn, Chairman of Nissan, Chairman and CEO of Renault and Chairman of Mitsubishi, was arrested in Tokyo following an internal whistleblower investigation at Nissan that allegedly discovered Ghosn, aided by another Nissan Executive, underreported his annual compensation to the tune of $44.1 million.

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.

Auto giant Nissan has said it will dismiss chairman Carlos Ghosn after finding he under-reported his income "over many years", among other allegations of misconduct. "Saikawa will also propose the removal of Greg Kelly from his position as Representative Director".

Nissan's board is now set to meet on Thursday, when it is expected to agree to sack Ghosn and Representative Director Greg Kelly. It was under Ghosn's guidance that Nissan recovered from near collapse and formed an alliance with Japan's Mitsubishi and Renault. Reports indicate that 2017 was the first time in four years that the chairman's salary had been under $8.9 million (1 billion JPY).

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.

Around midday on Monday, there were no reports of any statement from Ghosn or Kelly.

Renault shares tumbled 13 percent in Paris to be among the worst performing stocks in Europe.

"Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation".

"This is an act that can not be tolerated by the company", he said. "This is a negative impact of the long regime of Mr. Ghosn", Saikawa, 65, said of the accusations against Ghosn.

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Mr Kelly - who has also been arrested, according to the firm - was described as a close aide to Mr Ghosn.

A representative for the Tokyo prosecutors said they don't comment on individual cases. He also serves as chairman and chief executive of France's Renault and chairman of Mitsubishi Motors.

"With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership", wrote Liam Proud, a columnist for Reuters' Breakingviews.

In the hours after news broke of Ghosn's alleged behaviour, both Nissan and Renault reaffirmed their commitment to the carmaking venture.

Ghosn's slow retreat from his roles at each company-including stepping down as Nissan's CEO a year ago and suggesting he may step down from his post as CEO of Renault before the scheduled end of his term in 2022-have sparked rumors that he wasn't on board with plans for further integration and might be thinking of leaving the alliance anyway.

Ghosn is credited with helping bring about a remarkable turnaround at Nissan, resuscitating it from near bankruptcy by cutting thousands of jobs and shutting plants.

Monday's news marks a stunning downfall for an executive long-regarded as the man who saved Nissan almost 20 years ago.

In 2016, Ghosn also took charge at troubled Mitsubishi after Nissan threw it a lifeline, buying a one-third stake for about $3 billion (AUD) as it wrestled with a mileage-cheating scandal that hammered sales.

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