Nissan chief Carlos Ghosn 'arrested over'misconduct'

Mae Love
November 20, 2018

Carlos Ghosn, Chairman and Chief Executive of Renault, poses with the new Alpine A110 sports vehicle during the inauguration of the new production line in Dieppe, France, December 14, 2017.

The Japanese broadcaster NHK said Mr Ghosn was arrested on Monday after he voluntarily submitted to questioning by Tokyo prosecutors.

Earlier today, ( Carlos Ghosn, Chairman of Nissan, Chairman and CEO of Renault and Chairman of Mitsubishi, was arrested in Tokyo following an internal whistleblower investigation at Nissan that allegedly discovered Ghosn, aided by another Nissan Executive, underreported his annual compensation to the tune of $44.1 million.

Japanese media reports suggest that Ghosn has been arrested in Tokyo in relation to the allegations, while Nissan has issued an official apology for the "great concern" that the situation has caused to its shareholders and stakeholders.

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

The company said it has been providing information to Japanese prosecutors and is cooperating fully with their investigation.

Ghosn was appointed CEO of Nissan in 2001 following his successful efforts to restructure the French auto giant Renault, and transitioned previous year into a role as board chairman.

The Nissan-Renault-Mitsubishi group is among the biggest auto alliances in the world, selling about 10 million vehicles a year. A Brazilian-French citizen of Lebanese descent who has been with Nissan since 1999, Mr Ghosn heads the world's largest automaker alliance.

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Nissan's CEO Hiroto Saikawa said at a press conference that too much power had been concentrated in Ghosn's hands.

"With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership", wrote Liam Proud, a columnist for Reuters' Breakingviews. The actual amount he made was hundreds of millions of yen more, say people familiar with the matter. Renault, Nissan, Mitsubishi Motors and AVTOVAZ together sold 9.96 million vehicles in 2016 - more than one in nine cars worldwide.

"This is an act that can not be tolerated by the company", he said. There he helped engineer a turnaround in the carmaker's fortunes that earned him the nickname "Le Cost Killer".

France's President Emmanuel Macron said his country would be extremely vigilant about the fate of Renault and its alliance with Nissan after Monday's events.

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

Ghosn is considered one of the auto industry's top executives and is one of the most highly paid corporate bosses in Japan.

Ghosn, 64, began his career at tiremaker Michelin in France in 1976 before moving on to Renault in 1996. Hollande's socialist government imposed limits on executive pay at state-run companies and tried to do the same in the private sector but backed down amid concerns such action would scare away foreign investment. He was widely praised in Japanese industry circles for delivering sorely needed cost cuts and introducing greater efficiency at a time when Nissan needed a fresh start.

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