Nissan Ousts Chairman Carlos Ghosn Over Financial Misconduct
Nissan’s board of directors will move to quickly oust chairman Carlos Ghosn after an internal investigation revealed he participated in several serious acts of financial misconduct. Ghosn — unquestionably one of the most influential executives in the automotive industry — was arrested on Monday, November 19, according to police sources in Japan.
The Japanese firm posted a statement online that explains it began investigating Ghosn and Greg Kelly, one of its representative directors, when it received troubling information from a whistleblower several months ago. Investigators concluded Ghosn and Kelly intentionally underreported their respective salaries to the Tokyo Stock Exchange’s securities report to make it appear as though they earned less than they actually did. Ghosn’s salary has been the central point of many controversies in recent years, both in Japan and abroad, but it’s too early to tell whether he lied about his wages to evade taxes or to appease the investors who feel he makes too much.
The investigators also found evidence of “other significant acts of misconduct,” including Ghosn’s personal use of the company’s assets, and confirmed Kelly’s involvement. Nissan declined to provide additional details. Japanese newspaper Yomiuri learned Ghosn and Kelly were both arrested. Though Nissan hasn’t confirmed the report, it noted it will fire both men in the coming days.
“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 wrote in a statement. In an odd twist of fate, Saikawa replaced Ghosn as CEO in 2017.
Ghosn’s arrest will have far-reaching implications. As of writing, he’s also the chairman and CEO of Paris-based automaker Renault, the chairman and CEO of the Renault-Nissan-Mitsubishi alliance (an industrial giant he created almost singlehandedly), and the chairman of Mitsubishi. With retirement in sight, he was beginning to hone his successors. The process should shift into high gear in the coming months. If Ghosn is convicted, he will most likely need to step down from all of the aforementioned positions and, at the very least, pay a significant fine.
