Nissan's Carlos Ghosn arrested over allegations of 'significant' financial misconduct

Nissan Chairman Carlos Ghosn, one of the auto industry's most high-profile executives, has been arrested in ...

Posted: Nov 20, 2018 1:17 PM
Updated: Nov 20, 2018 1:17 PM

Nissan Chairman Carlos Ghosn, one of the auto industry's most high-profile executives, has been arrested in Japan after an internal investigation revealed "significant acts of misconduct" over many years by him and another top executive.

The stunning announcement ripped through a powerful global alliance, slamming the stocks of Nissan (NSANY) and Renault (RNSDF), where Ghosn also serves as chairman.

Asia

Business figures

Carlos Ghosn

Companies

Continents and regions

East Asia

Japan

Nissan Motor Corporation

Arrests

Crime, law enforcement and corrections

Criminal law

Law and legal system

Law enforcement

Renault SA

Tokyo

Misconduct

Society

Automotive industry

Banking, finance and investments

Business and industry sectors

Business, economy and trade

Financial markets and investing

Securities trading

Stock markets

Together with Japan's Mitsubishi Motors (MMTOF), Nissan and Renault make up the biggest global carmaking alliance, which makes one of every nine cars sold around the world. The three companies employ more than 470,000 people in nearly 200 countries.

Nissan said in a statement that it had been investigating Ghosn, a 40-year veteran of the auto industry, and another board member for months following a whistleblower report.

"These two gentlemen were arrested this evening, that is what I understand," Nissan CEO Hiroto Saikawa said at a press conference in Tokyo late on Monday.

Japanese prosecutors confirmed the arrests of Ghosn, 64 and the other board member, Greg Kelly, on suspicion of violating financial laws by filing false statements. According to the prosecutors' statement, the two men allegedly collaborated to under-report Ghosn's income by about 5 billion yen ($44 million) over a five-year period ending in March 2015.

CNN wasn't immediately able to reach Ghosn, Kelly or their representatives for comment.

The maximum punishment in Japan for filing a false financial statement is up to 10 years in prison and a fine of up to 10 million yen ($89,000).

Nissan said its internal investigation also found "numerous other significant acts of misconduct ... such as personal use of company assets."

As a result, CEO Saikawa will propose to Nissan's board of directors to "promptly remove Ghosn from his positions as chairman and representative director," at a meeting on Thursday, the company said. He will also try to have Kelly removed from the board.

Renault and Nissan shares plunge

Shares in Renault, where Ghosn is chairman and CEO, closed down more than 8% in Paris. Renault said its board would convene "very shortly" to discuss Nissan's revelations.

French President Emmanuel Macron said the government, which owns 15% of Renault, was watching closely.

"The state, as a [Renault] shareholder, will be extremely vigilant regarding the stability of the alliance and the group," Macron said during a visit to Belgium.

Nissan's announcement came after the close of trading in its stock in Tokyo on Monday. Its shares were down around 5% on Tuesday morning.

"Nissan deeply apologizes for causing great concern to our shareholders and stakeholders," the company's statement said. "We will continue our work to identify our governance and compliance issues, and to take appropriate measures."

Ghosn is also chairman of Mitsubishi Motors. The Japanese company said it was proposing that its board "promptly" remove Ghosn from that position. Its shares fell about 7% in Tokyo on Tuesday morning.

Under Ghosn, the three carmakers formed an alliance that rivals Volkswagen (VKLAF) and Toyota (TM) in terms of vehicle sales. The alliance sold 10.6 million vehicles last year.

Nissan said last year that it paid Ghosn a salary of 1.1 billion yen ($9.7 million) in the year ended March 2017, his last as CEO. Nissan doesn't break out individual board members' compensation in its annual report.

A career spanning continents

Born in Brazil, Ghosn started his career at French tire maker Michelin in 1978, working his way up to running the company's North American operations.

He moved to Renault in 1996. After the French carmaker established its alliance with Nissan in 1999, he became the Japanese firm's chief operating officer, helping steer it out of financial crisis.

The turnaround earned him the nickname "Le cost killer."

Ghosn was promoted to CEO of Nissan in 2001, and then made the unusual move of taking on the role of Renault CEO in 2005. That made him the first executive to run two Fortune Global 500 companies at the same time.

After Nissan took a 34% stake in Mitsubishi Motors in 2016, Ghosn handed off the Nissan CEO role to Saikawa.

West Lafayette
Clear
48° wxIcon
Hi: 78° Lo: 48°
Feels Like: °
Kokomo
Clear
51° wxIcon
Hi: 77° Lo: 50°
Feels Like: 51°
Rensselaer
Clear
46° wxIcon
Hi: 69° Lo: 49°
Feels Like: 44°
Fowler
Clear
48° wxIcon
Hi: 77° Lo: 49°
Feels Like: °
Williamsport
Clear
48° wxIcon
Hi: 79° Lo: 47°
Feels Like: 47°
Crawfordsville
Clear
48° wxIcon
Hi: 77° Lo: 45°
Feels Like: 46°
Frankfort
Partly Cloudy
48° wxIcon
Hi: 75° Lo: 47°
Feels Like: 46°
Delphi
Clear
48° wxIcon
Hi: 78° Lo: 50°
Feels Like: 44°
Monticello
Partly Cloudy
48° wxIcon
Hi: 78° Lo: 52°
Feels Like: 44°
Logansport
Clear
46° wxIcon
Hi: 78° Lo: 48°
Feels Like: 44°
Warming up with plenty of sunshine!
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 947918

Reported Deaths: 15377
CountyCasesDeaths
Marion1291181990
Lake635721103
Allen53899761
Hamilton44082449
St. Joseph42122590
Elkhart33803491
Vanderburgh30574449
Tippecanoe26915251
Johnson23727418
Hendricks22410342
Porter21832347
Clark17562231
Madison17492385
Vigo16302285
Monroe14545191
LaPorte14389239
Delaware14183222
Howard13971273
Kosciusko11498135
Hancock10935166
Warrick10737178
Bartholomew10635170
Floyd10514208
Wayne10077226
Grant9213204
Morgan8928160
Boone8463111
Dubois7791123
Dearborn769490
Henry7691133
Noble7466101
Marshall7409128
Cass7219118
Lawrence7026153
Shelby6647111
Jackson661386
Gibson6190107
Harrison609386
Huntington604495
Montgomery5853105
DeKalb581091
Knox5535104
Miami548888
Putnam543268
Clinton537465
Whitley529354
Steuben501768
Wabash488692
Jasper483861
Jefferson474492
Ripley457777
Adams446068
Daviess4231108
Scott409165
Clay394957
White393858
Greene393392
Wells389884
Decatur388797
Fayette378578
Posey362341
Jennings356056
Washington334747
LaGrange325175
Spencer321136
Fountain318455
Randolph317190
Sullivan309449
Owen287064
Starke282864
Fulton280454
Orange277859
Jay257038
Perry254152
Carroll245229
Franklin242838
Rush237030
Vermillion235050
Parke221420
Tipton212055
Pike211740
Blackford170534
Pulaski168551
Crawford147318
Newton145845
Benton143916
Brown135846
Martin130217
Switzerland126910
Warren115616
Union98511
Ohio80511
Unassigned0482

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events