The chairman of Nissan has just been sacked after the board voted against his continued rule and recent public scandals. Justin McCurry of The Guardian news reported on Thursday that “Nissan Board sacks Chairman Carlos Ghosn after serious misconduct.”
The seven-member board at the Japanese carmaker have voted unanimously to dismiss Carlos Ghosn. Although he received credit for saving the car company from bankruptcy two decades ago. He did this by forging a strong alliance with Mitsubishi Motors and Renault. Mitsubishi motors partnered with the Renault-Nissan alliance after negotiations with Mr Ghosn.
Recently the 64-year-old has been accused of under-reporting £35 million in income between 2011 and 2015. Greg Kelly, a senior executive of NISSAN was also been sacked. Both leaders have since been taken into custody in Tokyo. No one has been charged, but under the law, suspects can be detained for 20 days without an indictment. The ultimate penalty upon conviction for the violation of finance and exchange laws could be 10 years’ imprisonment, a 10 million yen (£69,000) fine or a combination of both.
Auto analyst for CLSA Securities Japan, Christopher Richter said “I’d be surprised if it impacts car sales very much. Consumers are discerning enough to say: this car, the wheels might fall off so I’m not going to buy it. This car company, the executive might have done something kind of dodgy, but I do like the car or not.”
On Monday of this week, Renault voted to keep him as their Chief executive, although Thierry Bollore was appointed as the interim chief. “Mr Ghosn, temporarily incapacitated, remains chairman and chief executive officer, to preserve the interests of the group and the continuity of its operations” a statement from Renault’s board.
A meeting is set to take place in which the future of the pair will be discussed. It will be determined if they will remain on the NISSAN board or not, although the final decision is up to the shareholders. In a statement issued by the company, NISSAN said the decision of the board was taken to “minimize the impact and confusion on the day-to-day cooperation among the alliance partners.”
Allegations against the Nissan chairman include misuse of the company’s assets for personal gain. Ghosn is suspected of using luxury homes purchased by the car making giant in four different countries without paying a dime as part of his alleged financial misconduct.
The Asahi Shimbun newspaper quoted unnamed sources as saying that Ghosn ordered Kelly by email to make false statements on his remuneration. Starting in 2002, Ghosn instructed that $100,000 be paid to his sister annually for a non-existent advisory role. The emails have been seized by prosecutors according to a report in Japan times.
Kyodo, Japanese news agency reported that Nissan’s Chief executive Hiroto Saikawa will take over as interim chairman. Earlier this week he promised that Nissan would try to “stabilize the situation, and normalize day-to-day operations” for staff and business partners.
It was also reported by Broadcaster NHK naming several anonymous sources that NISSAN spent millions of dollars on these homes without legitimate justifications for business purposes. “Millions of dollars had been spent to purchase and renovate the homes in Lebanon, France, Brazil and the Netherlands, NHK said.
All alliances forged under his leadership, however, remains intact when Nissan said in a statement that the board “acknowledged the significance of the matter and confirmed that the long-standing alliance partnership with Renault remains unchanged…”
A special committee is said to be created and it would be led by the three independent directors of the company including Keiko Ihara. This committee would take advice from third-party experts on how to improve the governance and management system of director’s pay. This committee would oversee the appointment of Mr Carlos Ghosn’s successor as chairman.
According to Financial Times, Ghosn’s fall from grace was as a result of working on a full-blown merger between Nissan and Renault. This was at the French government’s urging, despite strong reservations among some of the car making giant’s executive.
“For me, the future of the alliance is the bigger deal. It’s obvious that in this age we need to do things together. To part would be impossible,” a senior Nissan official told reporters on Wednesday when asked about Ghosn’s arrest.
Although not charged, Carlos Ghosn and his alleged accomplice Greg Kelly remain in custody in a facility in Tokyo. The facility is said to be in contradiction to his lavish lifestyle.
Prosecutors are awaiting more evidence before proceeding with charges against the pair. It is not known at the moment if others are under investigation.