Nissan removes Ghosn as chairman after arrest

TOKYO, Nov 22, 2018, Kyodo News. Nissan Motor Co. decided at a board meeting Thursday to remove Carlos Ghosn as chairman following his arrest for alleged financial misconduct, marking an abrupt end to his nearly two decades of charismatic leadership.

Ghosn’s close aide Greg Kelly was also dismissed as representative director after the company’s probe uncovered his “deep involvement” in “significant acts of misconduct” by Ghosn, including using company assets for personal gain and understating pay in securities reports presented to Japanese regulators.

Ghosn — who became Nissan president in 2000 and served as chief executive officer from 2001 to 2017 while concurrently serving as chairman beginning in 2008 — and Kelly will both stay on as board members of the Japanese carmaker. Nissan needs to gain shareholders’ approval to oust the two from the board.

The removal of Ghosn, one of Japan’s highest paid executives, as chairman may accelerate a review of the three-way alliance between Nissan, Renault SA and Mitsubishi Motors Corp., which Ghosn currently leads as its architect, some analysts said.

Following Ghosn’s arrest by Tokyo prosecutors Monday for allegedly underreporting his salary, Nissan CEO Hiroto Saikawa unveiled the contents of a months-long internal probe triggered by a whistleblower report that allegedly uncovered misconduct by Ghosn and Kelly. He said he would seek their dismissal as chairman and representative director, respectively, by the company’s board.

Mitsubishi Motors is also set to dismiss Ghosn as chairman at its board meeting next week. Renault, meanwhile, named its Chief Operating Officer Thierry Bollore as acting CEO without ousting Ghosn at its board meeting Tuesday.

Ghosn was arrested for allegedly violating Japan’s Financial Instruments and Exchange Act by underreporting his remuneration by a total of about 5 billion yen ($44 million) over five years to March 2015. Kelly was also arrested on suspicion of conspiring with Ghosn.

The 64-year-old, known as a savage cost-cutter, helped save Nissan from near bankruptcy after he was sent to the company by Renault and became chief operating officer in June 1999, three months after the French and Japanese carmakers forged a capital alliance.

He propelled growth under the alliance after becoming president in 2000 and chief executive the following year. He held the CEO post until 2017 while concurrently serving as chairman beginning in 2008.