Yahoo Autos Nissan Chairman Carlos Ghosn Removed by Board Vote; Renault Names Interim Leaders
UPDATE 11/26/18: Mitsubishi has removed Ghosn as chairman and appointed CEO Osamu Masuko as a temporary replacement. Executives from the three automakers are meeting in Amsterdam this week to discuss the future of the Renault-Nissan-Mitsubishi alliance, according to Reuters, including possibly reducing Renault’s stake and adding a fourth member to the Renault board.
UPDATE 11/22/18: In a unanimous vote, the Nissan board of directors voted today to remove Carlos Ghosn as chairman. Although details of the allegations against him have not been officially released, the Wall Street Journal is reporting that Ghosn is accused of using company funds, through a subsidiary in the Netherlands, to buy multimillion-dollar residences and renovate them. He is also reportedly facing charges for having arranged consulting fees for his sister, who did not actually perform the work, according to an anonymous source cited by the Journal. These charges are in addition to the allegation that Ghosn grossly underreported his compensation in securities documents filed by Nissan. Ghosn retains a seat on the corporate board pending scheduling of a shareholder meeting.
UPDATE 11/21/18: Renault has appointed two interim executives as chairman and CEO while Carlos Ghosn is "temporarily incapacitated," according to a company statement. Thierry Bolloré, chief operating officer, is taking over as CEO, while Philippe Lagayette, the Renault board's top independent director, will work as chairman. Ghosn is in a Tokyo jail and will remain there for an additional 10 days by court order, despite not yet being charged with any crime, according to the Wall Street Journal. Renault said it wants Nissan to "provide all information in their possession arising from the internal investigations." The French finance minister, Bruno Le Maire, whose government owns 15 percent of Renault, said that "we don't have any evidence at this point justifying the accusations brought against Carlos Ghosn." Ghosn reportedly bought homes in Brazil and Lebanon with company money through a "Dutch subsidiary," according to unnamed sources cited by the Nikkei Asian Review. We will continue to update this developing story.
Carlos Ghosn is all but gone from Nissan. The high-profile Renault, Nissan, and Mitsubishi chairman and Renault CEO was arrested Monday in Tokyo and charged with underreporting his income in corporate filings, according to Japanese broadcaster NHK.
Nissan said a whistleblower tip launched an "internal investigation over the past several months" regarding improper conduct involving Ghosn and Greg Kelly, a high-ranking board member with the power to sign contracts on behalf of the company. Their investigation, in conjunction with the Japanese Public Prosecutors Office, found that both men underreported their compensation in Tokyo Stock Exchange filings "over many years," Nissan said in a statement. According to NHK, for the total of the past five fiscal years ending in March 2015, Ghosn reported "less than five billion yen" ($44 million at today’s rates) when it was actually almost twice that amount. Without elaborating, the company also alleged Ghosn took advantage of "company assets" for his personal use. CEO Hiroto Saikawa is calling on the board to immediately oust both executives from the company, with a meeting scheduled for Thursday.
Ghosn, who is also chairman of Mitsubishi Motors and CEO and chairman of Renault, joined Nissan when it was nearly bankrupt in 1999. At that time, Renault purchased a 37 percent stake in the struggling Japanese automaker and Ghosn, then also an executive vice president at the French automaker, took over as Nissan’s chief operating officer. As CEO in 2001, his Nissan Revival Plan quickly flipped the company back into the black with higher margins and expanding sales in China. While increasing low-cost models in emerging markets, including reviving the Datsun brand, Ghosn-who became CEO of Renault in 2005-also pushed Nissan into expensive battery-electric vehicles well before most mainstream automakers. He is also credited with backing quirkier, low-volume models like the Murano CrossCabriolet, a convertible SUV. Ghosn stepped down from the CEO position in 2017 but maintained his chairman title.
Ghosn’s trio of titles, along with the structure of the Renault-Nissan-Mitsubishi Alliance itself, is a rarity in the automotive industry. Renault currently owns 43 percent of Nissan, while Nissan owns 15 percent of Renault and 34 percent of Mitsubishi. Ghosn has been reportedly working to merge the three companies into a single corporation.
In a statement issued Monday morning, Renault said it intends to hold a meeting of its board of directors "very shortly" and expressed the board's "dedication to the defense of Renault's interest in the Alliance."
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