Nissan to Oust Chairman Ghosn for Allegations

Nissan Motor Co Ltd stated that it planned to oust Chairman Carlos Ghosn after alleging that he had spent company money for personal use and committed other serious acts of misconduct.

Japanese media reported that Ghosn, who is also the chairman and chief executive of Nissan’s French partner Renault and one of the most popular known figures in the global car industry, had already been arrested.

The Japanese automaker said that based on a whistleblower report, it had been investigating  possible improper practices by Ghosn and Representative Director Greg Kelly for several months, and that it was fully cooperating with investigators.

“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 amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,” said Nissan in a statement.

The company said that it would brief the media on Monday night. It also said that CEO Hiroto Saikawa would suggest that the Nissan board remove Ghosn and Kelly.

Renault shares tumbled 13 percent in Paris to be among the worst performing stocks in Europe Nissan’s German-listed securities plummeted 12 percent.

Removing out Ghosn, who is 64 years old, is bound to raise worries about the future of the alliance that he personally shaped and had pledged to consolidate with a deeper tie-up, before stepping back from the operational leadership.

“The initial share price reaction shows how pivotal he is,” said Citi analyst Raghav Gupta-Chaudhary.

 

The current structure of alliance has long undervalued Nissan shares held directly by Renault investors, he added.

He also said that Ghosn “is viewed as critical for value unlock.”

The reports came as a shock in Japan where Ghosn, who is a rare foreign top executive, is well regarded for having turned Nissan around from near bankruptcy.

The Japanese newspaper reported on its website that prosecutors had begun searching the offices of Nissan’s headquarters and other locations on Monday evening.

Spokesman for Renault and the Renault-Nissan-Mitsubishi Motors alliance did not right away return calls and messages seeking comment on the arrest reports.

Brazilian-born and with Lebanese descent and a French citizen, Ghosn started his career at Michelin, France, moving on to Renault.

He started working at Nissan in 1999 after Renault bought a controlling stake and became its CEO in 2001. Ghosn remained in that position until last year.

In June, Renault shareholders approved Ghosn’s 7.4 million euro, or $8.45 million, compensation for 2017. In addition to this, he received 9.2 million euros in his final year as Nissan chief executive.

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