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Nissan to fire its chief after ‘arrest’ over ‘misconduct’

November 20, 2018 00:00:00


Carlos Ghosn

The Japanese carmaker, which owns the UK's second-largest car factory in Sunderland, said claims raised by a whistleblower also led it to uncover alleged use of the business's money for personal purposes, according to Sky News.

The announcement was made shortly after reports emerged Carlos Ghosn, who is also chief executive and chairman of Renault, was to be arrested in Japan following an internal investigation.

State broadcaster NHK later said he was detained by prosecutors in Tokyo.

Renault shares hit their lowest level in more than four years on news of the scandal - down almost 15% at one stage.

Trading in Nissan shares had already ceased for the day.

Nissan said it had been examining Mr Ghosn's reporting of his pay and bonuses for several months and the actions of another director, Greg Kelly.

Its statement said: "The investigation showed that over many years both Ghosn and Kelly have 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.

"Also, in regards to Ghosn, 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 has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. We will continue to do so."

Neither Mr Ghosn or Mr Kelly - an American - have commented on the allegations.

According to the Jiji news agency it involved the alleged under-reporting of almost 10 billion yen (£69m) by Mr Ghosn as five billion yen over five years from 2011.

He is seen by many observers as the most powerful executive in the automotive industry.

He oversees the alliance involving Nissan, Renault and Mitsubishi and has led recoveries at all three brands.

Mr Ghosn, who was born in Brazil, made his name after taking the top job at Nissan in 2001 and was credited with leading its fightback from near bankruptcy.

The company's statement concluded: "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.

"Saikawa will also propose the removal of Greg Kelly from his position as representative director.

"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."

Ana Nicholls, analyst at the Economist Intelligence Unit, said of the developments: "The ousting of Carlos Ghosn is not only shocking in itself, but it also brings to a head a question that has long hung over the alliance - how it will survive his departure.


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