Nissan’s board unanimously removed chairman Carlos Ghosn in 2018 after allegations of financial misconduct, ending a dramatic standoff with partner Renault over the future of the alliance’s most powerful figure.
The decision followed a four-hour board meeting in Yokohama and came after Renault abandoned a late push to postpone the vote. Nissan said the alliance with Renault would remain in place despite the fallout.
Ghosn was arrested in Japan on Monday after an internal Nissan investigation said it had uncovered serious wrongdoing, including under-reporting of remuneration and the personal use of company assets. The company also dismissed Greg Kelly, a representative director, after reviewing what it described as a detailed internal report.
Neither Ghosn nor Kelly had been able to respond publicly because both were still in custody.
Renault warned Nissan before the vote ¶
Before the board met, two Renault directors asked for the dismissal decision to be delayed until the internal probe and legal process were complete, according to sources familiar with the matter. They warned that Renault would use its rights under the alliance master agreement if Nissan went ahead.
Those rights included naming Ghosn’s successor and appointing a fourth Renault nominee to the Nissan board, the sources said.
The warning followed an earlier message from Nissan chief executive Hiroto Saikawa, who had told Renault that the company’s investigation was expanding to include Renault-Nissan finances.
Renault owns 43.4 percent of Nissan. Although Nissan is almost 60 percent larger by sales, Renault still holds the stronger position in the shareholding structure, while Nissan owns a 15 percent non-voting stake in the French carmaker.
Ghosn had been pushing for deeper Renault-Nissan integration, a plan that met resistance inside Nissan and later fed speculation about possible motives for his arrest.
Paris shifts tone after the findings ¶
After the board was briefed on the findings, the mood in Paris changed. An official at French President Emmanuel Macron’s Elysee Palace said: “The accusations are extreme, certainly, but they are also precise,” and added, “We know there’s a flourishing conspiracy theory about all this, but that’s really not our thinking.”
Renault shares rose 0.5 percent at 1615 GMT after earlier losses in the week, while Nissan shares closed 0.8 percent higher.
Nissan did not name a replacement for Ghosn, despite reports that Hiroto Saikawa would become interim chairman.
Japanese prosecutors say Ghosn and Kelly conspired to understate Ghosn’s remuneration by about half of the 10 billion yen he earned at Nissan over five years from 2010.
Following a whistleblower alert, Nissan’s internal probe also accused Ghosn of misappropriating company assets and misrepresenting the purpose of company investments.
A Nissan executive with direct knowledge of the meeting said Renault’s representatives initially reacted with disbelief. “There was some talk and frustration about an unjust arrest,” he said. “But they suddenly changed when they heard the contents - and understood that this wasn’t some strange conspiracy.”
Leaked claims widen the fallout ¶
Japanese newspapers published leaked details from the Tokyo prosecutor’s investigation. Asahi Shimbun reported that Ghosn had emailed Kelly instructions to make false statements about his remuneration.
The Yomiuri, Japan’s biggest-circulation daily, reported that Nissan had paid Ghosn’s elder sister $100,000 a year since 2002 for a non-existent advisory role. It also said she lived in a luxury Rio de Janeiro apartment funded by a Nissan subsidiary, citing unidentified sources.
Mitsubishi Motors, which joined the alliance in 2016, also planned to remove Ghosn as chairman the following week. Renault’s board had named interim replacements on Tuesday but kept Ghosn on as chairman and chief executive, with government backing.
Even if he were cleared, French officials said Ghosn would struggle to rebuild the cross-cultural trust that once held the alliance together.
“It really seemed there was a common vision between Ghosn and Nissan,” the Elysee official said. “But now we realize there was in fact a yawning gap.”
