Renault shares plummet as chairman arrested
- Author: Eleanor Harrison Nov 20, 2018,
Nov 20, 2018, 2:16
Nissan Motor Company said on Monday it was moving to fire Carlos Ghosn from his post as chairman after Japanese media reported he was arrested for using company money for personal use and engaging in other serious acts of misconduct.
The news was first reported by the Asahi Shimbun, which claimed it had "learnt that the Tokyo Prosecutor's Office asked Nissan chairman Carlos Ghosn on the evening of the 19th [of November] to come in voluntarily on allegedly violating the Financial Instruments and Exchange Acts, as he is suspected of underreporting his salary".
Nissan said CEO Hiroto Saikawa will promptly propose dismissing Ghosn as chairman and representative director, as well as representative director Greg Kelly who was also arrested on suspicion of violation of the financial law, at a board meeting.
Ghosn, among the most prominent vehicle industry leaders globally and also the chief executive of Renault, was detained over a suspected breach of Japanese financial law, Japan's national broadcaster said. The allegations also concern a Nissan representative director, Greg Kelly, who was also arrested.
Renault shares fell sharply in Paris, and were down 5.5% in early session trading, among the worst performing stocks in Europe.
Ghosn, 64, built the three-way union of Renault, Nissan and Mitsubishi Motors. After the French carmaker established its alliance with Nissan in 1999, he became the Japanese firm's chief operating officer, helping steer it out of financial crisis.
Nissan is readying to set in place actions which would remove its long-time chairman Carlos Ghosn, the automaker confirmed Monday morning. Ghosn is of French, Brazilian and Lebanese background and lives in both France and Japan.
Saikawa vowed that Ghosn's arrest would not affect the alliance, adding that board members would be closely communicating on the issue.
"This is an act that can not be tolerated by the company", he said during a news briefing. His annual pay dropped to 735 million yen ($6.5 million) in 2017, down more than 30 percent.
He is Chairman and chief executive of the Renault-Nissan Alliance, one of the world's largest automotive groups.
A spokesman for Renault declined to comment.
Ghosn is suspected to have under-reported his pay package in the company's financial reports for the goal of dissimulating his true compensation.
Ghosn is one of the highest-paid executives, if not the highest-paid, in Japan, but is believed to have under-reported his incomes over the last couple of years by millions of dollars and used corporate assets for personal use.
Express.co.uk has contacted press offices for both Renault and Nissan for comment.
Nicknamed "Le Cost Cutter", Ghosn's appointment inspired fears of social and economic upheaval amid plant closings, mass layoffs and the potential damage his reforms might inflict on Nissan's ties with its suppliers.
The company said it would brief reporters on Monday night at 10 p.m. Tokyo time (1300 GMT).
Asked about how Ghosn's reign had collapsed as if by a "coup d'etat", Saikawa stressed that there was no such intent behind the internal probe.