Nissan puts brakes on naming Carlos Ghosn successor

Pay scandal involving ousted chairman has widened to include carmaker itself

Carlos Ghosn was arrested in Tokyo for alleged understatement of his income. Photograph: Toru Hanai/Reuters

Carlos Ghosn was arrested in Tokyo for alleged understatement of his income. Photograph: Toru Hanai/Reuters

 

Nissan’s directors put the brakes on naming a successor for Carlos Ghosn as the pay scandal that landed the high-flying executive in a Tokyo jail widens to include the carmaker itself.

The board met on Monday to decide on a successor for Ghosn, who was ousted as chairman the same week he was arrested on allegations of understating his pay and misusing Nissan’s assets. Instead, directors appointed a committee to look into governance at the carmaker, which was indicted along with Ghosn by Japanese prosecutors last week.

The Nissan board may wait for the committee’s comments before naming a new chairman, chief executive Hiroto Saikawa told reporters. The committee will give its recommendations by March, almost four months after the November 19th jailing of Mr Ghosn and his hasty removal as Nissan’s chairman three days later.

The delay stands in contrast to Nissan’s conduct immediately after Ghosn’s arrest, when Mr Saikawa convened a press conference the same evening to angrily condemn his former mentor’s actions. It also comes as the carmaker faces increasing pressure from Renault, its largest shareholder and partner in the world’s biggest auto alliance. The French company sent a letter on Friday demanding a meeting of all investors to discuss Nissan’s difficulties.

Meanwhile, Renault, whose most powerful shareholder is the French state, is considering candidates to replace Mr Ghosn as its chairman, but the board isn’t ready to remove him, said a person familiar with the matter.

One possibility is Michelin chief executive Jean-Dominique Senard, said the person, who asked not to be identified because the deliberations are private. Mr Ghosn is likely to remain chairman until he has had a chance to publicly defend himself, although this timing could change, the person said. Interim chief executive Thierry Bollore is likely to take on the role permanently, people familiar with the matter have said.

Indictment

Mr Ghosn (64) was arrested in Tokyo for alleged understatement of his income, and on December 10th he and Nissan were indicted by Japanese prosecutors over the suspected misconduct. The company’s indictment has expanded the scrutiny beyond Mr Ghosn and raised questions about its corporate governance. It also cast attention on the leadership of Mr Saikawa, so much so that his job may be on the line, according to analysts and people familiar with the situation inside the company.

In a sign of a deepening divide between the partners, Renault is pushing Nissan to call a shareholder meeting as soon as possible to discuss the Japanese carmaker’s indictment, governance and the French company’s appointees on Nissan’s board, people familiar with the matter have said. Mr Saikawa said on Monday the Japanese carmaker should wait for guidance from the governance committee before calling an extraordinary shareholders’ meeting.

Nissan, meanwhile, has long been unhappy about what it considers an outsized French role in the partnership, and is seeking to redress perceived imbalances, people familiar with the matter have said. Officially, Nissan has stated it’s committed to the partnership and on Monday said it would keep its members fully informed.

Nissan conducted a months-long probe into Mr Ghosn’s financial reporting and alleged misuse of company assets. A former Ghosn protégé, Mr Saikawa has been Nissan’s chief executive since last year and has emerged as a driving force in the investigation.

The timing of the company’s probe prompted some analysts to say the scandal may have been manufactured in order to block a merger that Mr Ghosn was advocating between Nissan and Renault. Mr Saikawa has denied that such a motive was behind the investigation.

“Nissan has an interest in making sure things go well with Renault,” said Loic Dessaint, who heads Paris-based Proxinvest, a shareholder advisory firm which has long demanded more transparency in the governance of the Renault-Nissan alliance. “The risk for Nissan would be that Renault starts behaving like a controlling shareholder.” – Bloomberg