Nissan's board of directors sacks its president after his arrest

TOKYO – Nissan Motor Co. on Thursday sacked president Carlos Ghosn, putting an end to the powerful leader's nearly two-decade rule over the Japanese automaker after he was arrested for alleged financial irregularities.

In an hour-long meeting, the company's board unanimously voted to remove Ghosn to the presidency and representative representation, Nissan said in a statement. His internal investigation, triggered by a whistleblower, revealed a serious misconduct, including an under-reporting of his income and an improper use of the company's assets.

It was an astounding fall for one of the biggest personalities in the automotive industry. Mr. Ghosn helped transform the Renault SA and Nissan companies in France, then managed an alliance between them, which had sold 10.6 million cars last year, ahead of its rivals.

Renault is still shocked by the arrest of Ghosn, intervened Monday, and the course of his action has not yet recovered. His acting chief, his deputy general manager, Thierry Bolloré, has publicly voiced Thursday night for the first time since Ghosn was put out, and sought to appease the markets, as buyers of cars and its employees by promising them continuity.

In a video released by Renault, Bollore said the automaker was still considering launching several new models next year. Recognizing the "special situation" in which the company is located, he announced his "unqualified commitment" to 180,000 Renault employees, partners and customers. Renault's board of directors decided not to fire Ghosn, but to install temporary leadership.

The French government, which owns 15% of Renault, is also worried. French Finance Minister Bruno Le Maire said Thursday that France has still not received any information from Japan on the charges Mr Ghosn was charged with and on "respect for the presumption of innocence". 39; innocence. "

Addressing the Associated Press, The Mayor said that "these turbulences should not weaken" the Renault-Nissan alliance or its hundreds of thousands of jobs.

In a statement to the Tokyo Stock Exchange, Nissan said its investigation revealed an improper use of corporate investment funds and money spending for personal purposes.

The Wall Street Journal, citing an anonymous source close to the Nissan survey, said Ghosn had used the company's funds to buy personal residences and enrich his sister.

Another Nissan executive, Greg Kelly, was arrested in Japan because he was suspected of collaborating with the wrongdoing. He will also be removed from his position as director of representation, Nissan said. Their replacements will be decided later, he added.

Ghosn, 64, is suspected of under-reporting $ 44.6 million in revenue between 2011 and 2015, according to Tokyo attorneys.

The Nissan Board of Directors is made up of nine members, including Ghosn and Greg Kelly. The other seven members of the board of directors voted at the meeting, including two members of Nissan and two of Renault.

Ghosn and Kelly will remain on Nissan's board for the moment, this decision being made by shareholders. No date has yet been set for a shareholder meeting.

Ghosn is also chairman of Mitsubishi Motors Corp., a small Japanese automaker, a partner in the Renault-Nissan alliance, which plans to hold a board meeting next week.

He has been detained since his arrest in a Tokyo detention center on Monday in the same conditions as other detainees, Tokyo Deputy Prosecutor Shin Kukimoto said on Thursday. He gave little details about the case.

Under Japanese law, suspects can be detained for up to 20 days by possible charge without formal indictment. Extra charges may be tagged, resulting in longer holdings. Neither has been charged so far.

In the event of a violation of the finance and foreign exchange laws, the maximum penalty after a conviction is 10 years imprisonment, a fine of $ 89,000, or both.

French citizen born in Brazil, Ghosn became a kind of superstar in Japan, while he was directing Nissan 's rebirth since the bankruptcy after Renault sent him to help in 1999.

Ghosn held the position of General Manager of Nissan from 2001 to last year. He became general manager of Renault in 2005, simultaneously managing the two car manufacturers. In 2016, he also became president of Mitsubishi Motors Corp. after Nissan incorporated it into the alliance.

Kelly, 62, joined Nissan, the maker of the Leaf electric car and Infiniti luxury models, in the United States in 1988. He became a member of the board of directors in 2012. He worked in human resources and sales. alliance management.

Analysts believe that the future of the alliance between Nissan and Renault could be at stake, although Nissan's statement Thursday said the company's leadership was determined to downplay the impact of the deal. Ghosn deal on the partnership. Renault owns 43% of Nissan's capital and 15% of it.

Economic ministers from Japan and France met Thursday in Paris to discuss the issue and issued a statement saying that both sides are determined to support the alliance.

Nissan has announced that its board will look into the possibility of setting up a third-party committee to strengthen Nissan's management and compensation governance.

Janet Lewis, general manager and director of industrial research for Asia at Macquarie Capital Securities in Tokyo, said in an interview that an adjustment was needed to give Nissan more of a say in the future. alliance with Renault.

The partnership remains crucial for both companies, she said, because in addition to financial ties, companies share technology and components. Automakers should look more like roommates than a married couple, she said.

"So they have to find a way to share their home and pool all their expertise because it is very necessary in terms of new automotive technology and developing a new platform," said Mr. Lewis. . "They have to find a way to continue in this way while living happily in the same house."