Nissan chief Carlos Ghosn has been arrested in Tokyo, the auto giant confirmed on Monday, hours after it announced that an internal investigation had found Ghosn guilty of financial misconduct and proposed that he be dismissed.
Nissan chairman Carlos Ghosn, one of the world’s best-known businessmen, was arrested in Japan on Monday in a shocking fall from grace linked to allegations of financial misconduct.
Japan’s public broadcaster NHK and other media outlets reported earlier that Ghosn had been arrested after being questioned by Japanese prosecutors for various improprieties including under-reporting his income and misuse of funds.
Nissan said it had been investigating its chairman for months and would now move to fire him.
French President Emmanuel Macron on Monday said that France would work to preserve the stability of Renault and its alliance with Nissan after the Japanese carmaker took steps to oust its chairman.
“It’s too early to comment on the reality or materiality of the accusations, about which I have no further information,” Macron told reporters in Brussels.
“As a shareholder, however, the French government will remain extremely vigilant regarding the stability of the alliance, the (Renault) group and ... its employees, who have the full support of the state.”
Ghosn is the chairman of the Renault-Nissan-Mitsubishi alliance.
Shockwaves
The news about Ghosn sent shockwaves through the auto industry, where he is a towering figure who is credited with turning around several major manufacturers.
In a statement, Nissan said it launched an investigation after receiving a whistleblower report and had uncovered misconduct going back several years.
The auto maker said it had launched an investigation into both Ghosn and Representative Director Greg Kelly several months ago.
“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 amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,” the statement said.
“Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.”
The company said it had provided information to Japanese prosecutors and would propose to the board of directors that it “promptly remove Ghosn from his positions” along with Kelly.
The news first emerged Monday evening Tokyo time, when the Asahi Shimbun newspaper reported Ghosn was being questioned by prosecutors and was likely to face arrest.
Japanese media later said Tokyo prosecutors were raiding Nissan’s headquarters in the city of Yokohama.
The Kyodo news agency said Ghosn was suspected of understating his income by 5 billion yen, or around $44 million, over five years from 2011. It also reported that Kelly had been arrested.
Renault shares plunged more than 12 percent in late morning trading in Paris on the news, which emerged after the end of the Tokyo session. The firm has not commented.
‘Le Cost Killer’
Ghosn’s arrest would “rock the Renault-Nissan-Mitsubishi alliance as he is the keystone of the alliance”, said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm.
“He is the man of charisma for the alliance. It is likely to have a negative impact on its brand image,” he told AFP.
Nicknamed "Le Cost Killer", Brazil-born Ghosn, 64, is known for overhauling Renault and Nissan starting in the 1990s.
Renault came to the rescue of the then-ailing Japanese automaker in 1999 and parachuted in Ghosn, who set about slashing costs and jobs in a huge corporate overhaul.
In 2016, Ghosn also took charge at troubled Mitsubishi after Nissan threw it a lifeline, buying a one-third stake for about $2.2 billion as it wrestled with a mileage-cheating scandal that hammered sales.
He is credited with saving Nissan from bankruptcy through a series of hardnosed measures including closing plants and restructuring. He now has instant name recognition in Japan, where he is a rare high-profile foreign executive.
Ghosn has been regarded as the glue holding together the sprawling alliance of Nissan, Renault and Mitsubishi, and questions have been raised in the past about how his eventual departure might affect the coalition.
Earlier this year he told AFP there were “no taboos” in the relationship between the auto firms, and said they were looking to increase convergence, while remaining independent.
The group’s Alliance 2022 plan, unveiled last year, targets making more than 10 billion euros in cost savings over the five years and raising sales to 14 million vehicles.
Ghosn has not yet commented on the allegations.
(FRANCE 24 with AFP and REUTERS)
