Renault shares plummet as chairman arrested

Marco Green
November 20, 2018

Ghosn, 64, and Representative Director Greg Kelly had been officially reporting lower compensation "to reduce the disclosed amount", Nissan said in a statement.

"While I think [this news] will have an impact, especially on Renault, this is just essentially about correcting a serious misconduct, and is not a matter that should hurt our partnership with Renault, Nissan, and Mitsubishi", he said.

Vehicle giant Nissan has said it will dismiss chairman Carlos Ghosn after finding he under-reported his income "over many years", among other allegations of misconduct.

Ghosn and Kelley allegedly conspired to falsely report Ghosn's income as approximately 4.987 billion yen for a five-year period ending June 2015 to the Kanto Local Financial Bureau, while the actual amount he made was about 9.998 billion yen.

Nissan Motor Chairman Carlos Ghosn has been arrested by Tokyo authorities, the carmaker said Monday, and is expected to be fired by the company at a Thursday board meeting.

The Tokyo District Public Prosecutor's Office had questioned Ghosn earlier in the day and arrested and Kelly. Ghosn's slow retreat from his roles at each company-including stepping down as Nissan's CEO a year ago and suggesting he may step down from his post as CEO of Renault before the scheduled end of his term in 2022-have sparked rumors that he wasn't on board with plans for further integration and might be thinking of leaving the alliance anyway.

Ghosn then became chairman of the board of that automaker as well, and vowed to revive it by integrating Mitsubishi Motors into the Renault-Nissan manufacturing alliance.

He has been accused of "significant acts of misconduct", including under-reporting his pay package and personal use of company assets.

Together, Renault, Nissan and Mitsubishi employ more than 470,000 people in almost 200 countries, according to the alliance's website.

Ghosn is a towering figure in the motor industry and one of very few foreign top executives in Japan, and is revered there for rescuing Nissan from near bankruptcy. He receives numerous paychecks in his multiple roles as chairman of the Renault-Nissan-Mitsubishi alliance, CEO of Renault and chairman of both Nissan and Mitsubishi.

"Nissan deeply apologises for causing great concern to our shareholders and stakeholders", said a company statement.

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.

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

"Ghosn seems to be built for the job: He has the ability to connect with strangers instantly and to compartmentalize, no discernible private life outside his family, and a willingness to travel 300,000 miles a year (that's 11 circumnavigations)".

Ghosn has served as the company's chairman since 2017 but was CEO for most of his career with the automaker.

Sent to Japan by Renault in 1999 following the formation of the Renault-Nissan-Mitsubishi Alliance, Mr Ghosn burnished his name as an industry maverick as the architect of Nissan's turnaround.

French President Emmanuel Macron warned Paris would be "extremely vigilant" about the stability of Renault and the three-firm alliance after Ghosn's arrest. He has been credited with turning around both Renault and Nissan, before going on to become the linchpin of the Renault-Nissan Alliance.

Other reports by Click Lancashire

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