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The board of directors of Japanese automaker Mitsubishi Motors, an ally of Renault and Nissan, decided on Monday to send Carlos Ghosn to the presidency of the board after his arrest last week, citing a lack of confidence.
Prosecutors arrested Ghosn on November 19, suspected of underreporting his income of $ 44 million over five years. Nissan Motor Co. removed him from his presidential post last week, saying an internal investigation had revealed that Mr Ghosn had abused the company's money and holdings. .
Mitsubishi has announced that its current CEO, Osamu Masuko, will assume the duties of Acting President and CEO pending the holding of a general meeting of shareholders. Ghosn had lost the confidence of Nissan and would have trouble continuing to act as president.
Masuko told reporters that the council's decision was unanimous.
Seven members of Mitsubishi Motors Corp.'s eight-member board of directors attended Monday's meeting, the company said.
The arrest of Ghosn in Tokyo marks an astounding fall for a leader who dominated the Japanese auto industry for two decades and led Nissan's alliance with French Renault SA.
Ghosn also led the addition of Mitsubishi in the alliance. Nissan took a 34% stake in Mitsubishi in 2016 after the smaller builder was involved in a scandal over inspection reports.
Japanese media, citing unidentified sources, reported that Ghosn and Greg Kelly, a leader arrested for collaborating with Ghosn, claimed their innocence. Ghosn has not made any public comments.
The two leaders have not yet been charged. Under Japanese law, a suspect may be held in custody for up to three weeks on alleged charge without charge being laid.
Renault has retained Ghosn as managing director. But given the composition of the Mitsubishi board, little opposition to his dismissal is expected.
The board consists of Mr. Ghosn, Mitsubishi Motors Managing Director, Osamu Masuko, two Nissan people, two Mitsubishi Group companies and two foreigners, a writer and an academic.
Concerns are growing over the future of the alliance between Renault and Nissan. The future of the alliance with Mitsubishi, being newer, could be even more precarious.
Alliances often benefit automakers as they share technology, auto parts and supplier and sales networks. Sales volume tends to reduce costs.
According to analysts, this sharing has become increasingly important as companies develop electric vehicles, Internet connectivity and artificial intelligence of vehicles.
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Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama
On Instagram at https://www.instagram.com/yurikageyama/?hl=en
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