Nissan’s Own Carlos Ghosn Accused of Misconduct, Arrested
He will be "promptly removed" from his positionby Ciprian Florea, on
Nissan Chairman and Renault Chairman and CEO Carlos Ghosn has been arrested by prosecutors in Japan for "significant acts of misconduct." Nissan said Ghosn and another board member had been under investigation for months following a whistleblower report. As one of the auto industry’s most important executives, Ghosn will be "promptly removed" from his positions, according to Nissan CEO Hiroto Saikawa.
Ghosn is being investigated for underreporting his income
Specific details are still under wraps and Nissan wasn’t able to disclose much due to the ongoing investigation, but Ghosn has been arrested in Japan. Apparently he’s being investigated for underreporting his income, but Nissan said that "numerous other significant acts of misconduct have been uncovered," including "personal use of company assets." Greg Kelly, another member of the Nissan board, has been arrested as well.
Nissan had been investigating both Ghosn and Kelly for months following a whistleblower report. Company CEO Hiroto Saikawa confirmed that he will propose to Nissan’s board of directors to "promptly remove" Ghosn and Kelly from their positions.
What Are The Implications?
Ghosn is also the CEO and Chairman of Renault and the Chairman of Mitsubishi
Well, they’re enormous. Carlos Ghosn is no regular CEO or Chairman. He’s the mastermind who put together Nissan and Renault in their current alliance. He also brought Mitsubishi Motors under the same roof recently. On top of being the former CEO and (still) current Chairman of Nissan, Ghosn is also the CEO and Chairman of Renault and the Chairman of Mitsubishi.
Under his supervision, this three-automaker alliance grew strong enough to rival companies like the Volkswagen Group and Toyota in terms of global sales, with 10.6 vehicles delivered in 2017.
The Nissan-Renault Alliance is pretty much Ghosn’s vision. He is the company and this scandal and his removal from his positions will send shockwaves through all the companies involved.
It’s Already Happening
It took only a few hours for Nissan-Renault shares to plunge. As of this writing, Nissan shares dropped almost nine percent, while Renault shares took a 12-percent tumble. The French government, which owns 15 percent of the Renault, is also keeping a close eye on the investigation.
"Nissan deeply apologizes for causing great concern to our shareholders and stakeholders," the Japanese company said statement said. "We will continue our work to identify our governance and compliance issues, and to take appropriate measures."
The End of a 40-Year Career?
This scandal might just put an end to Ghosn’s 40-year-long career in the industry. The Brazilian-born started with tire maker Michelin in 1978 and worked his way up to lead the brand’s North American business by 1989.
He joined Renault in 1996 and became Nissan's chief operating officer in 1999, after the two companies formed their alliance.
Ghosn helped steer Nissan out of a financial crisis and was promoted to CEO of Nissan in 2001. Four years later he also became the CEO of Renault.
He became Chairman of Nissan after the Japanese company acquired a 34-percent stake in Mitsubishi Motors in 2016.
Nissan paid Ghosn a salary of almost $10 million a year as a CEO. Although the company doesn’t reveal individual board members compensation in its annual report, it’s safe to assume he earned more than that as a Chairman.