Nissan to oust Chairman after finding ‘significant acts of misconduct’

Carlos Ghosn

Carlos Ghosn

The two executives were accused of conspiring to underreport Ghosn's salary for a number of years and using company assets for personal purposes.

In Japan and across the business world, where Nissan chairman and Renault CEO Carlos Ghosn, was quasi-revered for reviving two of the world's most well-known vehicle manufacturers, news of his arrest on Monday sent shockwaves.

The Japanese broadcaster NHK said Mr Ghosn was arrested on Monday after he voluntarily submitted to questioning by Tokyo prosecutors. He and his first wife had four children: one born in Brazil and the other three in the US when Mr. Ghosn worked for Michelin in Greenville, S.C., before moving to Renault.

Another analyst also told CNBC's that the alliance will likely continue despite Ghosn's arrest. France's Emmanuel Macron said on Monday his country "will be extremely vigilant to the stability of the alliance and the group".

Yokohama-based Nissan Motor said it is cooperating with prosecutors in their investigation.

Company officials have said the firms have been increasingly enjoying the benefits of the partnership, with the cost-saving synergy logging a record €5.7 billion (about ¥730 billion) in fiscal 2017. He told reporters that the investigation had identified "serious misconduct".

He also is suspected of underpaying his share of the rent and misusing company funds on his company-issued housing in Lebanon, Paris, Amsterdam and Rio de Janeiro, where his apartment is on the wealthy Copacabana beach strip.

He said that because of the continuing investigation, he could not disclose many details.

Saikawa also said during his press conference that the Alliance will not be affected by Ghosn's ouster.

"We need to really look back at what happened, take it seriously and take fundamental countermeasures", he said.

Ghosn allegedly reported only half of the $US88.7 million he earned in a five year period ending in March 2015. The properties had no business objective and were not listed as benefits in TSE filings, NHK said.

The chairman of the Renault-Nissan-Mitsubishi alliance, Carlos Ghosn, has been arrested in Japan over allegations of financial impropriety and is expected to be sacked from his position.

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But experts said it is unlikely he will be able to stay on there or at Renault, where he is also chief executive.

"The last thing one of the world's biggest automakers needs is the disruption caused by an investigation into the behavior of a man who has towered over the global auto sector", said Hewson.

"Nissan, Renault and Mitsubishi all see merits of the alliance, which is formed in a quite complicated way with overlaps of various management members", he said.

Renault's stock was down more than 10% on Monday; Mitsubishi's fell by almost 3%, according to FactSet.

In the hours after news broke of Ghosn's alleged behaviour, both Nissan and Renault reaffirmed their commitment to the carmaking venture.

Still, the alliance Mr. Ghosn built pumped out 10.6 million vehicles past year, just behind Volkswagen AG and ahead of Toyota Motor Corp., adding to his reputation as one of the world's most successful corporate titans.

The allegations came to light after a tip-off from a whistleblower.

Ghosn is credited with helping Nissan improve the profitability of its business operations.

For the past two decades, he has maintained an unusually high profile in a nation where foreign chief executives of major Japanese companies are still relatively rare.

Ghosn became a nemesis of French unions and left-wing politicians, who saw him as a symbol of capitalism's excesses, particularly its rich executive pay packages.

Company documents show that Ghosn received $8.9 million in yearly pay until 2016, when shareholders voted against his pay deal.

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