Nissan's Ghosn suspected of using firm's overseas houses for free

Why home builder stocks are getting crushed

Why home builder stocks are getting crushed

Nissan shares have hit a two-year low as its chairman Carlos Ghosn remains in custody over a series of claims including a failure to declare £34.5m in earnings.

Nissan said an internal investigation, triggered by a tip-off from a whistleblower, revealed Mr Ghosn engaged in wrongdoing including personal use of company money and under-reporting for years how much he was earning.

Japan's NHK and Kyodo News Service reported that Nissan paid Ghosn about $89 million over the five years ending in 2015.

Nissan says it has been providing information to the Japanese Public Prosecutors Office and has been "fully cooperating" with its investigation.

The chairman was arrested in Tokyo on Monday by Japanese prosecutors for violating Japan's Financial Instruments and Exchange Act by under-reporting his compensation.

Mr Ghosn, a towering figure in the vehicle industry, will be sacked from the Japanese firm after a board meeting on Thursday, its chief executive said.

It was a stunning development that will pose a daunting test for the Nissan-Renault-Mitsubishi alliance, one of the world's biggest automakers.

That's right... Carlos Ghosn is under investigation by both Nissan and Tokyo prosecutors for what they have called "significant acts of misconduct".

Brazilian-born, of Lebanese descent and a French citizen, Ghosn began his career in 1978 at tyremaker Michelin, before moving to Renault in 1996, where he oversaw a turnaround at the French automaker that won him the nickname 'Le Cost Killer'.

In 2016, Mr Ghosn became Mitsubishi Motors' chairman.

Early Samsung Galaxy S10 details leak out
For photography enthusiasts, this chipset has advanced ISP that supports up to 5 sensing elements. Samsung is expected to start mass producing the new Exynos 9820 before the end of the year.

At a press conference on Monday, the Nissan CEO said he felt "despair, indignation, and resentment". Ghosn voluntarily went with Tokyo prosecutors, the Asahi newspaper reported.

"Looking back, the concentration of power was something we need to deeply reflect on", he said, confirming the arrest of Mr Ghosn in Japan on Monday.

Ghosn's alleged improprieties also raise questions over governance at the alliance in which the three partners' boards are all chaired by a single executive.

Ghosn implemented tough cuts including closing Nissan plants and slashing 14-percent of the workforce.

Nissan's CEO Hiroto Saikawa said he would propose to the company's board that Ghosn and Kelly be removed from their positions at a meeting scheduled for Thursday.

Shares of Renault SA closed down 8.4 percent in Paris amid concern over repercussions for its alliance with Nissan and Mitsubishi Motors Corp., which slid 6.9 percent.

Kelly, a former lawyer who entered Nissan's North American arm in 1988, had tremendous influence within the automaker as a confidant of Ghosn, according to company officials.

When the scandal over improper inspections at Nissan emerged in 2017, Ghosn failed to fulfill his accountability and passed the responsibility down to Japanese executives. He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO in 2001.

"Ghosn seems to be built for the job: He has the ability to connect with strangers instantly and to compartmentalize, no discernible private life outside his family, and a willingness to travel 300,000 miles a year (that's 11 circumnavigations)".

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.