Nissan Motor Co chairman Carlos Ghosn arrested on suspicion of financial misconduct

Time 9:09 am, November 19, 2018

NISSAN Motor Co chairman Carlos Ghosn has been arrested on suspicion of under-reporting his corporate salary.

It was revealed this morning by Japanese newspaper The Asahi Shimbun that Tokyo prosecutors were moving to detain the chairman and chief executive of the Renault-Nissan-Mitsubishi Alliance today.

Nissan CEO Hiroto Saikawa will now propose that he is removed as chairman and representative director to the company’s board.

An internal investigation by Nissan found that Ghosn, pictured above, had reported his own income was lower than it actually was in the Tokyo Stock Exchange securities report, putting him in violation of Japan’s Financial Instruments and Exchange Act.

Greg Kelly

A statement issued today by Nissan revealed that the investigation began based on a whistleblower report into Ghosn and representative director Greg Kelly – and added that ‘numerous other significant acts of misconduct . . . such as personal use of company assets’ had also been uncovered relating to Ghosn.

It said: ‘The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation.

‘Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.

‘Nissan has been providing information to the Japanese Public Prosecutors’ Office and has been fully co-operating with their investigation. We will continue to do so.

‘As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, 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 deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.’

Earlier in the year, Ghosn confirmed again that he planned to remain in his role until at least 2022, suppressing questions about who would succeed him.

Now aged 64, he played a vital role in forging the Renault-Nissan alliance in the late-1990s and then the union with Mitsubishi in 2016.

The allegations are a serious blow at a time when Nissan and another alliance member, Mitsubishi Motor Co, are still overcoming scandals over their quality testing reporting.

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Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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