Sunday, 26 May, 2019

Ghosn ousted from Nissan due to "significant acts of misconduct"

Carlos Ghosn chief executive officer of Renault and Nissan Motor Carlos Ghosn chief executive officer of Renault and Nissan Motor Getty Images
Ginger Lawrence | 20 November, 2018, 08:04

The news of Ghosn's downfall emerged unexpectedly on Monday evening, with local media first reporting he was being questioned by prosecutors and that Nissan's headquarters was being raided.

Ghosn, 64, is described by the Guardian as "one of the world's most powerful auto bosses" who "has managed the seemingly impossible job of running one carmaker in Japan, and another in France". Nissan said in a statement that the directors' behavior constituted "clear violations of the duty of care", and "numerous other significant acts of misconduct" had been uncovered in regards to Ghosn.

"Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment", Saikawa said, apologizing for a full 7 minutes at the outset of the news conference.

The company added Ghosn's misconduct came after an internal report based on a tip from a whistleblower.

Nissan will propose dismissing Ghosn as chairman at its board meeting, the company said. "This is serious misconduct".

'Over many years, ' Nissan alleged, Ghosn and another board member misrepresented salaries, while Ghosn also used company assets for personal use. He said as recently as last month that he planned to stay on until 2020, although he stepped down from the top job at Nissan previous year, amid reports that the companies plan to change the alliance's structure, possibly through a merger.

In 2003 he was named by Fortune one of the 10 most powerful people in business outside the USA and was considered one of the most respected business leaders in the world. "We will continue our work to identify our governance and compliance issues, and to take appropriate measures", the company said.

Ghosn guided the alliance to vie with Volkswagen Group and Toyota to be the world's biggest automaker by volume, selling more than 10 million vehicles globally under 10 different brands.

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Renault owns 43.4 percent of Nissan, while Nissan owns 15 percent of Renault, with no voting rights in a partnership that began in 1999. Nissan's German-listed securities plunged 12 per cent.

The news of Mr Ghosn's troubles broke after Japanese markets had closed for the day.

Already at Nissan for 19 years, Ghosn signed a contract earlier this year that would have run through 2022. His compensation, high by Japanese standards, has been a source of controversy over the years.

Chairman Carlos Ghosn was arrested on November 19 by Tokyo prosecutors on suspicion of under-reporting his income in violation of the Financial Instruments and Exchange Act, according to people close to the investigation.

Ghosn's continued hold on power - he is CEO and chairman at Renault as well as chairman at Mitsubishi and CEO of the overall alliance holding company - has sparked concern that power is too centralized. There he helped engineer a turnaround in the carmaker's fortunes that earned him the nickname "Le Cost Killer".

Ghosn became a nemesis of French unions and left-wing politicians, who saw him as a symbol of capitalism's excesses, particularly its rich executive pay packages.

Nissan paid Ghosn 1.098 billion yen for the financial year ended March 2017, and 735 million yen for the following year, according to Nissan's annual securities reports.