Nissan’s Top Man Arrested!
Nissan’s well-respected Chairman, who earned the admiration of the industry by turning not one but two companies around, was arrested on Monday in Japan. Carlos Ghosn is being accused by his own employer for financial misconduct.
Ghosn had risen through the ranks at Renault, and played a pivotal role in the restructuring of the French automaker to return it to profitability. When Nissan formed an alliance with Renault, Ghosn also orchestrated the turnaround of the Japanese carmaker and became its CEO in 2001. He continued his responsibilities at Renault and was made its CEO in 2005. He is also Chairman of Mitsubishi Motors, which is the third entity in the Nissan-Renault-Mitsubishi Alliance.
Last year, Ghosn stepped down as CEO of Nissan but remained its Chairman. In Japan, where foreigners in leadership roles in local companies is a rare occurrence, Ghosn has proven to be the exception and a very successful one at that.
But internal investigations has, according to Nissan, found that Ghosn had understated his income and misused company assets. Another executive, Greg Kelly, a former senior HR officer, was also arrested.
A press release said that the investigation uncovered evidence that “over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation.”
It is likely that Ghosn will remove from the Boards of all three companies. To many, Ghosn was the Alliance, so now its existence is under threat: there are 470,000 employees and 122 plants under the Alliance; together, they account for over 10 million vehicles sales in 2017.
Nissan and Mitsubishi shares slumped by more than 6% and 5.5% in the Tokyo market this morning; Renault shares fell more than 8% in Europe following the arrest on Monday.