Nissan chairman Carlos Ghosn dismissed, held on misconduct charges

Carlos Ghosn

Nissan Motor said on Monday its internal investigations showed its chairman Carlos Ghosn had under-reported his income and had committed other misconduct.

Nissan shared its findings with public prosecutors, including evidence that Ghosn under-reported $40 million in compensation over five years.

Together, Renault, Nissan and Mitsubishi employ more than 470,000 people in almost 200 countries, according to the alliance's website.

As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan's Chief Executive Officer Hiroto Saikawa will propose to the Nissan Board of Directors to promptly remove Ghosn from his positions as Chairman and Representative Director. The allegations also concern another Nissan executive, its representative director Greg Kelly. Neither automaker has publicly spoken about the future of his roles.

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

He also is suspected of underpaying his share of the rent and misusing company funds on his company-issued housing in Lebanon, Paris, Amsterdam and Rio de Janeiro, where his apartment is on the wealthy Copa Cabana beach strip.

The companies in the alliance own parts of each other and share investments in new technologies, among other things. They are accused of under-reporting the size of Ghosn's compensation package "over many years", and Ghosn is accused of using company money for personal expenses.

The prosecutors, who reportedly arrested Ghosn after questioning him upon his arrival by private jet at Tokyo's Haneda airport, have 48 hours from the time of Ghosn's arrest Monday to decide whether to press charges. He is widely credited with saving Nissan from bankruptcy as well as running one of the automotive industry's few successful alliances. The actual amount he made was hundreds of millions of yen more, say people familiar with the matter.

In June, Renault shareholders approved Mr Ghosn's €7.4m pay for 2017.

The astonishing news first emerged early Monday evening, when the Asahi Shimbun newspaper reported Ghosn was being questioned by prosecutors and was likely to face arrest.

The Brazilian-born Ghosn also serves as the chairman of Mitsubishi Motors; chairman and CEO of Renault; and chairman and CEO of the Alliance, a carmaking unit consisting of Nissan, Renault, and Mitsubishi.

While running Nissan, Ghosn became CEO of Renault in 2005 and AvtoVaz in 2012, serving all three companies in the Nissan-Renault chain simultaneously.

It's a shock announcement for what had been seen as one of the key architects of Nissan's turnaround and the ongoing success of the Renault-Nissan-Mitsubishi Alliance.

At Nissan, he was paid about 1.1 billion yen for 2016 and about US$6.5 million in the most recent financial year.

He is also the mastermind behind the Alliance, which sold more than 10.6 million cars in 2017, the most of any automaker in the world.

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