Nissan prepares to fire Ghosn over financial misconduct allegations
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Ghosn's dismissal would mark a stunning fall from grace for the man who pioneered Nissan's comeback. Photo credit: Reuters |
TOKYO -- Nissan Motor is preparing to fire Chairman Carlos Ghosn for allegedly under-reporting his income and using corporate assets for personal use, a company spokesman said.
CEO Hiroto Saikawa, 65, will recommend to the automaker’s board of directors that Ghosn be dismissed, Nissan spokesman Nicholas Maxfield said Monday in Japan.
The company is also planning to fire fellow board member Greg Kelly, 62, who rose through the executive ranks as a director of human resources.
Ghosn is believed by Nissan to have under-reported his income over multiple years and misused corporate assets. Kelly was “deeply involved” in the scheme, Maxfield said.
Nissan would not immediately comment on the magnitude of the alleged under-reporting; Japanese media reported that it was by millions of dollars.
Ghosn under-reported nearly 10 billion yen ($88.70 million) in compensation as nearly 5 billion yen, Jiji news agency reported. Kyodo news agency said the under-reporting took place over five years, from 2011 to the present.
Media reports that Japanese prosecutors arrested Ghosn for alleged violations of the country’s financial laws. Ghosn voluntarily went with Tokyo prosecutors, Asahi newspaper reported.
Fall from grace
Ghosn, 64, one of Japan’s highest-paid executives, is joint chairman of the Renault-Nissan-Mitsubishi alliance and one of the industry’s most storied leaders.
This marks a stunning fall from grace for the man who pioneered Nissan’s comeback and has been credited for leading one of the auto industry’s few successful automotive partnerships, the long-running tie-up between Nissan and France’s Renault.
Ghosn expanded the alliance to include Mitsubishi Motors Corp. in 2016, by engineering Nissan’s purchase of a controlling stake in the smaller Japanese rival. Mitsubishi had no immediate comment on its plan of action following the news, a spokesman said.
Nissan did not say who would replace Ghosn as chairman nor when the board of directors would decide to remove him. Renault declined to comment.
Controversial compensation
The news also casts a shadow over the future of the Renault-Nissan-Mitsubishi alliance. Ghosn had been expected to step down as chairman of the alliance in the coming years, and he has been working behind the scenes to formulate a structure that will keep the carmakers working together while preserving their independence and brand identity.
In Japan, Ghosn has been a controversial figure for his outsized salary, routinely the top among this nation’s auto executives. Nissan, as a whole, argues it needs to pay its executives more than the Japanese average to attract top-tier global talent in an international industry.
Ghosn was sent by Renault in 1999 to take over a then flailing Nissan as COO. He became Nissan president the following year and was CEO from June 2001. He became co-current president of Renault in 2005 and chairman of Mitsubishi Motors in 2016. He relinquished his CEO title at Nissan last year.
Saikawa joined Nissan in 1977 and was its chief competitive officer from 2013 to 2016. He previously had roles as the chairman of the Management Committees of the Americas and Europe, as well as the executive vice president of purchasing.
Reuters contributed to this report
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