The Emperor has dethroned: the astounding fall of Carlos Ghosn from the top of the automotive industry

His vision seemed to work: The Ghosn Alliance manufactures one out of every nine cars sold in the world. But his future is now questioned after his arrest in Japan, his dismissal from the presidency of Nissan and his absence at Renault. Mitsubishi should send it back on Monday.

The Brazilian-born executive is accused of having benefited from his position at the top of Nissan, that he ran for over 15 years. The allegations include the concealment of millions of dollars of personal income and the use of the company's assets to his advantage.

While his reputation is being undermined and the empire he's built is put to the test, Ghosn is stuck in a prison cell in Tokyo facing the prospect of 10 years in prison in the event of conviction. He has not yet responded publicly to the allegations.

What would Ghosn have done?

Ghosn was arrested by Tokyo prosecutors on Monday, when he reportedly disembarked from a plane from Beirut, where he grew up. His arrest follows an internal investigation by Nissan that the company said revealed "serious acts of conduct" over several years, including an underestimation of its income in financial reports and misuse of the company's assets. .

Prosecutors say he and another Nissan director, Greg Kelly, have collaborated to underestimate Ghosn's revenue of about 5 billion yen ($ 44 million) over a five-year period ending in March 2015.

The Japanese public broadcaster NHK reported that Mr. Ghosn also failed to adequately disclose the homes he had provided to Nissan in four different countries. NHK added that prosecutors suspect Ghosn of pocketing money for other Nissan executives.

Nissan, who has not confirmed the details reported by NHK and other Japanese media outlets, has accused Kelly of being the "brain" behind the ploy.

How did we come here?

Ghosn was appointed CEO of Nissan in 2001 and is credited with a dramatic turnaround of the company, which was experiencing financial difficulties at the time.

Since then, he has deepened the integration between Nissan and Renault. Mitsubishi joined the alliance in 2016 after Nissan bought a 34% stake. Together, the three companies employ more than 470,000 people in nearly 200 countries.

But the partnership is uneven. Nissan, which is much larger and sells more vehicles than Renault, holds only a 15% non-voting interest in the French company. Renault holds a much more powerful 43% stake in Nissan.

"In purely monetary terms, Renault has obtained a better deal than Nissan," wrote this week analysts at the investment company SC Capital.

Some analysts believe that this has caused discontent Nissan managers, who were also uncomfortable with the possibility that Renault and Ghosn are looking for a full merger.

A number of analysts and commentators have suggested that Mr Ghosn was the victim of a "coup at the palace" by Nissan executives worried about the amount of power that he has. had accumulated.

Asked about speculation on the coup, a Nissan spokesman said the company "is firmly convinced that the investigation revealed a serious fault extending over several years" and that the measures she took against Ghosn were "fully necessary".

What's next for Ghosn?

Japanese prosecutors still have to indict Ghosn, a French citizen who grew up in Lebanon. He is currently detained in a detention center in Tokyo, where prisoners are usually fed three times a day and fed on Japanese futons.

Prosecutors received Wednesday permission to detain Ghosn for another 10 days, while continuing to question him. He is given access to his lawyer and the French consular services.

His long career at Nissan is almost certainly over. The board members voted unanimously Thursday night to remove Ghosn to the presidency after a long meeting.

Earlier this week, Renault did not send Ghosn back to the presidency but appointed an acting replacement.

What is the future of the alliance?

Nissan and Renault both said that the arrest of Ghosn would not affect the alliance. Officials from the French and Japanese governments echoed these sentiments.

"The long-standing alliance partnership with Renault remains unchanged," Nissan said on Thursday after it sacked Ghosn, adding that his goal would be "to minimize the potential impact and confusion."

But a lot of uncertainty remains. Analysts say Ghosn was the force that brought the three companies together.

A nightmare scenario for Nissan could arise if prosecutors failed to bring a case against Ghosn and that it would return to Renault's presidency. Analysts at SC Capital have speculated that Ghosn could retaliate by trying to drive Nissan out of the alliance and seeking a rapprochement with a bigger rival like GM.

This is probably unlikely because the failure of the alliance would be very expensive. Companies estimate saving more than 5 billion euros each year (5.7 billion dollars) by sharing technology and other resources.

"If the whole alliance explodes badly, it would be the worst strategic mistake made by a car manufacturer in decades," said Travis Lundy, analyst at the Smartkarma investment research network.