Nissan shares tumble as chairman Carlos Ghosn held in financial probe

20 November, 2018, 16:59 | Author: Sally Reid
  • Renault shares PLUNGE as chief Carlos Ghosn 'faces arrest in Japan'

Chairman Carlos Ghosn was arrested on November 19 by Tokyo prosecutors on suspicion of under-reporting his income in violation of the Financial Instruments and Exchange Act, according to people close to the investigation.

FBN's Susan Li on reports Nissan Motor Chairman Carlos Ghosn was arrested for allegedly under-reporting his salary.

Based on a whistle-blower tip, Nissan has been doing an internal investigation over the past several months into suspected financial misconduct involving Ghosn and director Greg Kelly, the company said.

Ghosn may have understated his income by 5 billion yen ($44 million) over five years, Kyodo news reported.

Carlos Ghosn, who is also chairman of auto manufacturer Nissan, is being investigated by Japanese authorities and has been arrested by prosecutors, according to Reuters.

Ghosn went voluntarily with Tokyo prosecutors early Monday and was later arrested, according to local news reports.

It said an investigation found that Ghosn and another board member had been under-reporting Ghosn's compensation.

Ghosn is the mastermind behind the Renault-Nissan-Mitsubishi Alliance, which sold more than 10.6 million cars in 2017, the most of any carmaker in the world.

YOKOHAMA, Japan Nissan Motor's chairman Carlos Ghosn has been arrested and will be dismissed for alleged under-reporting of his income and misuse of company funds, the company said Monday.

The men can be held without charge for 48 hours in Japan but that can be extended by up to 20 more days.

Ghosn forged alliances with Renault (RNSDF) and Mitsubishi Motors (MMTOF).

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French President Emmanuel Macron said the Government, the French car-maker's top shareholder, will be vigilant about Renault and its alliance with Nissan.

Shortly after the release of the reports, Nissan announced it was seeking the removal of Mr Ghosn over claims of "serious misconduct".

Nissan said it was providing information to the prosecutors and co-operating with their investigation.

"It's easy for a board to be alert when times are tough, but it's very important for a board to maintain their vigilance when times are good", she continues, adding that "sometimes boards can be deferential to an iconic CEO" such as Ghosn.

"This is an act that can not be tolerated by the company", he said.

Ghosn was seen inside Nissan as someone who keeps receiving high remuneration without confronting his own responsibility even when the company underperforms, while telling his subordinates to strictly achieve targets.

Shares in Renault, where Ghosn is CEO, plunged as much as 13% in Paris.

Unraveling of alliance is not total disaster for Renault shareholders - selling the Nissan stake may realize more value than current structure.

He served as Nissan's chief executive from 2001 until April 2017, becoming chief executive of Renault in 2005, leading the two major carmakers simultaneously. Since 1999 Nissan has been part of the Renault-Nissan-Mitsubishi Alliance.

Ousting Ghosn, 64, is bound to raise questions about the future of the alliance that he personally shaped and had pledged to consolidate with a deeper tie-up, before eventually stepping back from its operational leadership.

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