NISSAN HEAD ARRESTED!

by | Nov 19, 2018 | Breaking News, Business, Crime, Current Events, Government, News | 0 comments

The Nissan chairman, Carlos Ghosn, was arrested on Monday after an internal company investigation found that he had underreported his compensation to the Japanese financial authorities for several years.

Nissan said it was cooperating with Japanese prosecutors. It also said that it had opened its inquiry after a whistle-blower alleged that Mr. Ghosn had been misrepresenting his salary as well as using company assets for personal use. Both he and a director, Greg Kelly, who was also accused of misconduct, were taken in by authorities, the company said.

It is a remarkable tumble for Mr. Ghosn, who arrived at Nissan in 1999 after Renault, the French carmaker, bought a large stake in the Japanese company. It may prove to be an ignominious final chapter in the career of one of the most powerful and highly regarded executives in the automotive industry.

Earlier in the day, Nissan said in a statement that Mr. Ghosn and Mr. Kelly had been involved in misconduct and recommended that both be removed from their positions. Neither Mr. Ghosn nor Mr. Kelly could be reached for comment.

“I feel despair, indignation and resentment.” said Nissan chief executive Hiroto Saikawa at a news conference. “As the details are disclosed I believe that people will feel the same way as I feel today.”

Mr Saikawa said Nissan would now try to “stabilise the situation, and normalise day-to-day operations” for staff and business partners.

It said it had been conducting an internal investigation for several months, prompted by a whistleblower.

According to Nissan’s securities filings, Mr. Ghosn was paid 735 million yen, about $6.5 million, in cash in 2017, down 33 percent from the ¥1.1 billion he was paid in 2016.

The disclosure raised questions about Mr. Ghosn’s role as chief executive of the Renault-Nissan-Mitsubishi Alliance. Although he stepped down from the top job at Nissan last year, Mr. Ghosn, 64, has remained at the top of the world’s largest automotive alliance and told reporters as recently as last month that he planned to stay in that post until 2020. Mr. Ghosn was paid ¥227 million in cash and stock options by Mitsubishi Motors last year.

Mr. Ghosn insisted on a pay package of 7.4 million euros, about $8.5 million, for 2017, stoking controversy among shareholders and Renault board members. The French government, which has been trying to improve the image of a divide between the nation’s wealthy executives and working people, had insisted that Mr. Ghosn’s compensation be more limited.

The French state owns 15% of Renault, which in turn holds a 43.4% stake in Nissan. French President Emmanuel Macron said the country would work to preserve the stability of Renault and its alliance with Nissan.

“As a shareholder… however, the French government will remain extremely vigilant regarding the stability of the alliance, the (Renault) group and… its employees, who have the full support of the state.”

Mr Ghosn has been a titan of the motor industry for nearly 20 years. He was responsible for a dramatic turnaround at Nissan in the early 2000s when the car firm was on the verge of bankruptcy.

Dubbed the “cost-killer” in the 1990s for slashing jobs and closing factories, his reputation was cemented after his strategy succeeded.

Mr Ghosn began his career at Michelin in France, moving on to Renault. He joined Nissan in 1999 after Renault bought a controlling stake and became its chief executive in 2001. Mr Ghosn remained in that post until last year.

Mr. Ushijima said that Mr. Ghosn had been treated as untouchable at Nissan and that the revelations suggested serious problems with the corporate culture and oversight by the board of directors.

“Such misconduct cannot be done by Mr. Ghosn alone,” said Mr. Ushijima. “His subordinates must have been involved. And I really wonder how well the outside independent board members watched Nissan.”

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