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The Nissan Board burns Ghosn as chairman after the arrest

Nissan Motor Co. Carlos Ghosn fired as chairman on Thursday, limiting the powerful executive's nearly two decades of reign at…

Nissan Motor Co. Carlos Ghosn fired as chairman on Thursday, limiting the powerful executive’s nearly two decades of reign at the Japanese automaker after his arrest for alleged financial irregularities.

During an hour’s meeting, the company’s board was unanimously voted to dismiss Ghosn as chairman and as a representative leader, Nissan said in a statement. It said that its own internal investigation, caused by a whistleblower, found serious irregularity, including underreporting his income and abuse of corporate assets.

It was a fantastic downfall for one of the biggest figures in the automotive industry, a man helping to drive turnarounds on both France’s Renault SA and Nissan, and then managed an alliance between those who sold 1

Nissan said in a statement to the Tokyo Stock Exchange that its investigation revealed the abuse of

Renault voted to hold Ghosn to its CEO but appointed interim chief Thierry Bollore as chief executive.

Another Nissan executive, Greg Kelly, was arrested in Japan with suspicions of collaborating in error and will also be dismissed as a representative director, Nissan said.

Ghosn, 64, is suspected of under reporting $ 44.6 million in revenue from 2011 to 2015 according to Tokyo prosecutor.

Nissan’s Board consists of nine members, including Ghosn and Greg Kelly. The seven other board members voted at the meeting, including two members from Nissan and two from Renault.

Ghosn and Kelly will remain on Nissan’s Board for now because the decision will be up to shareholders.

Ghosn is also chairman of Mitsubishi Motors Corp., a smaller Japanese automaker who collaborates with the Renault-Nissan alliance and plans to hold a board meeting next week.

Ghosn has been held since his arrest Monday at a detention center in Tokyo, under the same spartan conditions as other prisoners, Tokyo prosecutor Shin Kukimoto told reporters on Thursday. He gave some details about the matter.

According to Japanese law, suspects may be held for 20 days at any charge without official prosecution. Additional charges may be noted, resulting in longer detentions.

The maximum sentence of conviction for breach of financial and exchange laws is 10 years imprisonment, a fine of 10 million yen ($ 89,000) or both.

A French citizen born in Brazil Ghosn became one of a company’s superstar in Japan when he led Nissan’s resuscitation from close bankruptcy after Renault sent him to help in 1999.

Ghosn served as Nissan’s CEO from 2001 to last year. He became Executive Director of Renault in 2005 and led the two car manufacturers at the same time. In 2016 he also became chairman of Mitsubishi Motors Corp. After Nissan took it into the alliance.

Kelly, 62, joined Nissan, manufacturer of Leaf electric car and Infiniti luxury models, in the US in 1988. He became a board member in 2012. His background is in human resources and alliance management.

Analysts say that the future of Nissan’s alliance with Renault may be at stake, but Nissan’s statement Thursday said the company’s leadership was determined to minimize the impact of Ghosn’s fall on the partnership. Renault owns 43 percent of Nissan and Nissan owns 15 percent of Renault.

“The long-term alliance partnership with Renault remains unchanged,” said the Nissan statement in English, emphasizing the alliance rather than the injuries.

The Economy Ministers of Japan and France met in Paris on Thursday to discuss the issue and released a statement saying both sides are required to support the alliance.

Nissan said the board will study setting up a third party to deny board management and compensation at Nissan.

CEO Hiroto Saikawa at a recent news conference on Monday said that too much power had been concentrated in Ghosn, with too little credit to the many others who worked for the company’s success.

Janet Lewis, Managing Director and Chief of Industrial Research in Asia at Macquarie Capital Securities in Tokyo, said in an interview that an adjustment was necessary to give Nissan more statement in the alliance with Renault. [19659002] Partnership remains crucial for both companies, she says, in addition to the financial ties, companies share technology and share.

Car manufacturers must be more like roommates than a married couple, “So they need to find a way to share their house and share all their expertise, because it’s very necessary in the new automotive industry, new platform development,” Lewis says.

“They have to find out how they can continue this and still live happily together in the same

Associated Presswriter Mari Yamaguchi contributed to this report.

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