Nissan has removed Carlos Ghosn as chairman after his arrest in Tokyo over alleged financial misconduct, according to Japanese media reports. The move marks a dramatic collapse for a man who helped rebuild the company’s fortunes and shape its alliance with Renault and Mitsubishi Motors.
Public broadcaster NHK and business daily Nikkei said the seven-member board voted to oust the 64-year-old executive. A source close to the company confirmed the decision and said an official statement was expected shortly.
Prosecutors intercepted Ghosn on Monday after he landed in Tokyo on a private jet. They accuse him and Nissan executive Greg Kelly of understating Ghosn’s income by about $44 million between June 2011 and June 2015.
The allegations emerged after a months-long internal Nissan investigation triggered by a whistleblower report. Ghosn has also been accused of other financial irregularities.
His removal raises fresh uncertainty over the Nissan-Renault-Mitsubishi alliance, which sold a combined 10.6 million cars last year and employs about 450,000 people worldwide. Ghosn was widely seen as the driving force behind the partnership.
Hiroto Saikawa, Ghosn’s hand-picked successor as chief executive, publicly backed his removal and referred to a “dark side” of the Ghosn era. Even so, Ghosn technically remains a board member until a full shareholders’ meeting votes to remove him.
Ghosn is being held at a Tokyo detention centre and has not spoken publicly since his arrest. Brazilian consul Joao de Mendonca visited him on Thursday and told AFP that Ghosn “sounded very well, in good health”.
Deputy chief prosecutor Shin Kukimoto said the offence Ghosn is accused of is among the most serious under Japan’s Financial Instruments Act. He said the case could carry a 10-million-yen fine and/or a 10-year prison sentence. He also said companies can be held responsible for falsified documents.
NHK reported that Nissan paid “huge sums” to provide Ghosn with luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam “without any legitimate business reason”.
Ghosn built a reputation as a hard-driving executive who cut costs aggressively, earning the nickname “Le Cost Killer” in France, where 47,000 people work for Renault. But his high salary and lavish lifestyle, which clashed with Japanese corporate culture, also drew criticism.
According to the Financial Times, the scandal broke while Ghosn was working on a full merger between Nissan and Renault. The paper said some Nissan executives opposed the plan and that his departure could be used to tilt the alliance in Nissan’s favour.
Renault has not moved to dismiss Ghosn, saying Nissan has not shared the evidence it collected. The fallout has also drawn attention from the French and Japanese governments, with President Emmanuel Macron saying France would be “extremely vigilant” about Renault and the alliance’s stability.
Analysts say neither company is likely to have the financial strength alone to fund the heavy investment needed for electric vehicles. As Deutsche Bank analyst Gaetan Toulemonde put it, “It would be like a couple divorcing after 20 years -- it would be complicated, very expensive and not easy to do.”
“Honestly, I don't know if it's even possible.”
