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Nissan Renault chief Carlos Ghosn faces arrest in Japan Nissan boss Carlos Ghosn's arrest in Japan shocks auto industry
(about 5 hours later)
Carlos Ghosn, the chairman of Nissan and chief executive of Renault, faces arrest in Japan and will be sacked by the car manufacturers for alleged financial violations. Carlos Ghosn, the chairman of Nissan and one of the world’s most powerful automotive executives, has been arrested by Japanese prosecutors in a move that sent shockwaves through the industry.
Renault’s market value dived by €2bn (£1.78bn) to €17bn after the report, with shares falling by 11%. The value of Nissan securities listed in Germany fell by 12%. Ghosn, the 64-year-old French-Brazilian, is suspected of having understated his income on financial statements and was exposed by a whistleblower. Nissan said it will fire him on Thursday as the company admitted it had left him in control for too long.
Ghosn was suspected of having understated his income on financial statements and had agreed to voluntarily speak to prosecutors. He was exposed by a whistleblower, Nissan said. Ghosn, a rare foreign top executive in Japan, is regarded as one of the leading figures in the global car industry, having forged an alliance between France’s Renault, Nissan and Mitsubishi that created the world’s second-largest car manufacturer.
In a statement, Nissan said that “over many years” Ghosn and another senior executive, Greg Kelly, had 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”.In a statement, Nissan said that “over many years” Ghosn and another senior executive, Greg Kelly, had 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”.
Nissan added: “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.”Nissan added: “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.”
Hiroto Saikawa, the chief executive and only remaining survivor of the firm’s top three executives, will propose to the board that Ghosn and Kelly be dismissed, citing “clear violations of the duty of care as directors”.Hiroto Saikawa, the chief executive and only remaining survivor of the firm’s top three executives, will propose to the board that Ghosn and Kelly be dismissed, citing “clear violations of the duty of care as directors”.
Ghosn, a rare foreign top executive in Japan, is regarded as one of the leading figures in the car industry, having turned Nissan around from near bankruptcy. Saikawa confirmed Ghosn and Kelly had been arrested, and apologised profusely to shareholders and employees for the chairman’s conduct. At the end of a 90-minute press conference Saikawa gave a bow of apology.
He had also in recent months made his mark on British politics, making outspoken comments on the effects of a hard Brexit on Nissan’s famous Sunderland factory. Ghosn was also personally involved in acquiring assurances from prime minister Theresa May that the car manufacturing sector would not be harmed in the aftermath of the Brexit vote in 2016. “Too much authority was given to one person in terms of governance,” he told reporters at Nissan’s headquarters in Yokohama.
“I have to say that this is a dark side of the Ghosn era which lasted for a long time.”
“Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,” Saikawa said.
Renault’s market value dived, with shares falling by about 9%. The value of Nissan securities listed in Germany fell by 12%.
The arrest sent shockwaves across the world, amid concerns that the Renault-Nissan-Mitsubishi alliance could break apart without the influence of Ghosn. French president Emmanuel Macron said his government, a major shareholder in Renault, “will be extremely vigilant to the stability of the alliance and the group”.
Brazilian-born, of Lebanese descent and a French citizen, Ghosn began his career at tyre manufacturer Michelin in France, before moving on to Renault. He joined Nissan in 1999 after Renault bought a controlling stake and became its chief executive in 2001.Brazilian-born, of Lebanese descent and a French citizen, Ghosn began his career at tyre manufacturer Michelin in France, before moving on to Renault. He joined Nissan in 1999 after Renault bought a controlling stake and became its chief executive in 2001.
Ghosn was the key figure behind the alliance between Nissan and Renault in 1999, joined by Mitsubishi in 2016, creating a top-four car firm through a series of interlinked shareholdings. The alliance, which sold 10.6m cars in 2017, has more than 450,000 employees worldwide.Ghosn was the key figure behind the alliance between Nissan and Renault in 1999, joined by Mitsubishi in 2016, creating a top-four car firm through a series of interlinked shareholdings. The alliance, which sold 10.6m cars in 2017, has more than 450,000 employees worldwide.
Kelly was a representative director at Nissan. A US citizen who trained as a lawyer, Kelly joined Nissan’s North American arm in 1988. In a statement, Renault’s lead independent director, Philippe Lagayette, affirmed his “dedication to the defence of Renault’s interest in the alliance”. The Renault board “will be convened very shortly”, he added.
Felipe Muñoz, a global automotive analyst at Jato, a research firm, said the arrest represented a crisis for the firms Ghosn headed, although he added that the alliance could survive.
“We could see some rivalry between Nissan and Renault to take control,” Muñoz said. “[Ghosn] was one of the most important figures in the industry. He was a rock star.”
Ghosn had also in recent months made his mark on British politics, making outspoken comments on the effects of a hard Brexit on Nissan’s famous Sunderland factory. Ghosn was also personally involved in acquiring assurances from prime minister Theresa May that the car manufacturing sector would not be harmed in the aftermath of the Brexit vote in 2016.
Officials at Unite, the union which represents workers at the Sunderland plant, are understood to be monitoring the situation.
Kelly, the other arrested executive, was a representative director at Nissan. A US citizen who trained as a lawyer, Kelly joined Nissan’s North American arm in 1988, including in human resources roles. He was described as the mastermind behind the alleged misconduct by Saikawa.
Nissan said it was cooperating with Japanese prosecutors.Nissan said it was cooperating with Japanese prosecutors.
Nissan’s statement said: “Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.”Nissan’s statement said: “Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.”
Renault declined to comment. Renault and Mitsubishi Motors declined to comment.
NissanNissan
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Automotive industryAutomotive industry
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