Nissan board meets to end Ghosn’s two-decade rule

Chairman was arrested in Japan, accused of financial misconduct

Nissan said this week that Carlos Ghosn, a veteran of the car industry, and senior executive Greg Kelly have been under investigation for several months and the company’s board will meet Thursday to consider their removal. Photograph:  Takashi Aoyama/Getty Images

Nissan said this week that Carlos Ghosn, a veteran of the car industry, and senior executive Greg Kelly have been under investigation for several months and the company’s board will meet Thursday to consider their removal. Photograph: Takashi Aoyama/Getty Images

 

Nissan will hold a board meeting on Thursday to oust chairman Carlos Ghosn after the shock arrest of its once-revered leader, ushering in a period of uncertainty for its 19-year alliance with Renault.

The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors, has been rattled to its core by Mr Ghosn’s arrest in Japan on Monday, with the 64-year-old group chairman and industry star accused of financial misconduct.

Mr Ghosn had shaped the alliance and was pushing for a deeper tie-up including potentially a full Renault-Nissan merger at the French government’s urging, despite strong reservations at the Japanese firm.

Japanese prosecutors said Mr Ghosn and representative director Greg Kelly, who has also been arrested, conspired to understate Mr Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen.

Nissan’s board meeting will be held sometime after 4pm (0700 GMT) at its headquarters in Yokohama and the company is likely to issue a statement afterwards, one senior Nissan official told reporters on Wednesday, requesting anonymity as the details were confidential.

Renault executives are expected to join by video conference.

Japanese media said that given Nissan’s board composition Mr Ghosn’s removal from the post is expected to be approved.

Nissan executives have five seats on the nine-member board, Renault loyalists have two seats and the remaining two are held by unaffiliated outside directors, a former bureaucrat and a race driver.

With Mr Ghosn and Mr Kelly still in detention, neither of the men will be able to vote or defend themselves at the meeting. A majority vote by the remaining seven members of board will be sufficient to strip them of their positions.

Renault has refrained from firing Mr Ghosn as chairman and CEO, although he remains in detention along with Kelly, whom Nissan also accuses of financial misconduct.

But Mitsubishi Motors plans to remove Mr Ghosn from his post of chairman at a board meeting next week.

Amid growing uncertainty over the future of the alliance, Japan’s industry minister and France’s finance minister are due to meet in Paris on Thursday to seek ways to stabilise it.

“For me, the future of the alliance is the bigger deal,” said the Nissan official, when asked about Mr Ghosn’s arrest. “It’s obvious that in this age, we need to do things together. To part would be impossible.”

Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Mr Ghosn engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.

Mr Ghosn and Mr Kelly have not commented on the accusations and Reuters has not been able to reach them.

Mr Ghosn is being held at the forbidding Tokyo Detention House, the Nikkei newspaper reported, where he faces an austere regime, a far cry from his usual luxury lifestyle, including restrictions on sleeping during the day and a requirement to wear a mask when meeting with visitors to prevent the spread of disease.

The detention house “is pretty cold at this of time year,” internet entrepreneur and convicted fraudster Takufumi Horie told his followers on Twitter.

The Asahi Shimbun said on Thursday, quoting unnamed sources, that Mr Ghosn had given Mr Kelly orders by email to make false statements on his remuneration. Tokyo prosecutors likely seized the related emails and may use them as evidence, the report said.

The Yomiuri, Japan’s biggest-circulation daily, cited unnamed sources as saying that Nissan’s internal investigation found that Ghosn had since 2002 instructed that about $100,000 a year be paid to his elder sister as remuneration for a non-existent advisory role.

The paper said Nissan had found through the investigation that Ghosn’s sister had in fact been living in and managing a luxury apartment in Rio de Janeiro that the company had bought through an overseas subsidiary, but had done no advisory work for the car maker. Nissan has shared the information with prosecutors, Yomiuri said.

Shares in Nissan closed up 0.8 per cent, in line with a broader market, ahead of the board meeting. – Reuters