Nissan exec arrested over financial misconduct

An internal Nissan investigation found Chairman Carlos Ghosn and board member, Greg Kelly, had been under-reporting Ghosn's compensation.

Posted: Nov 20, 2018 12:27 AM
Updated: Nov 20, 2018 1:00 AM

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

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.

The company said its investigation found that Ghosn, 64, and the other board member, Greg Kelly, had been under-reporting Ghosn's compensation. "Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets," it added.

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, plunged as much as 13% in Paris. Renault didn't immediately respond to a request for comment.

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. But its shares plummeted 10% on the Frankfurt stock exchange.

"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."

Global shockwaves

Ghosn is also chairman of Mitsubishi Motors. It declined to comment.

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's revelations came after Japan's Asahi Shimbun newspaper and broadcaster NHK reported that prosecutors were questioning Ghosn on suspicion of under-reporting his salary and may arrest him.

The prosecutors' office didn't respond to a request for comment outside regular office hours. CNN wasn't immediately able to reach Ghosn, Kelly or their representatives for comment.

Nissan said 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 company spokesman didn't immediately respond to a request for more information about Ghosn's compensation.

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
Partly Cloudy
72° wxIcon
Hi: 73° Lo: 47°
Feels Like: 72°
Kokomo
Clear
73° wxIcon
Hi: 73° Lo: 47°
Feels Like: 73°
Rensselaer
Partly Cloudy
70° wxIcon
Hi: 73° Lo: 47°
Feels Like: 70°
Fowler
Clear
72° wxIcon
Hi: 72° Lo: 48°
Feels Like: 72°
Williamsport
Partly Cloudy
74° wxIcon
Hi: 73° Lo: 48°
Feels Like: 74°
Crawfordsville
Clear
73° wxIcon
Hi: 74° Lo: 45°
Feels Like: 73°
Frankfort
Clear
73° wxIcon
Hi: 74° Lo: 47°
Feels Like: 73°
Delphi
Clear
71° wxIcon
Hi: 74° Lo: 47°
Feels Like: 71°
Monticello
Partly Cloudy
71° wxIcon
Hi: 75° Lo: 49°
Feels Like: 71°
Logansport
Clear
72° wxIcon
Hi: 73° Lo: 45°
Feels Like: 72°
A chilly start but scattered rain is possible tonight
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1001697

Reported Deaths: 16370
CountyCasesDeaths
Marion1349142114
Lake660941157
Allen57517796
Hamilton46157464
St. Joseph44155608
Elkhart35752508
Vanderburgh32119478
Tippecanoe27824258
Johnson24961444
Hendricks23767355
Porter22833364
Madison18662406
Clark18449252
Vigo17379302
Monroe15205198
LaPorte15077250
Delaware15006260
Howard14647288
Kosciusko12235147
Hancock11639175
Bartholomew11517179
Warrick11264189
Floyd11040214
Wayne10918252
Grant10000218
Morgan9427176
Boone8874116
Dubois8240131
Dearborn818193
Henry8154152
Noble7985106
Marshall7854134
Cass7510120
Lawrence7414170
Shelby7160117
Jackson694688
Gibson6534113
Harrison645891
Huntington635399
Knox6299106
DeKalb627699
Montgomery6214109
Miami590598
Putnam576278
Clinton571371
Whitley561555
Steuben557075
Wabash5289103
Jasper526677
Jefferson507596
Ripley496886
Adams476875
Daviess4632113
Scott436672
Greene422496
Wells421788
Clay420660
White416964
Decatur4139101
Fayette404987
Jennings385260
Posey375343
LaGrange354978
Washington354049
Randolph342599
Spencer337642
Fountain332658
Sullivan327452
Starke314069
Owen312770
Fulton307767
Orange292063
Jay282245
Perry264752
Franklin264542
Carroll259832
Rush259532
Vermillion256454
Parke230026
Pike228143
Tipton227059
Blackford191141
Pulaski182056
Crawford158823
Newton156648
Benton150217
Brown145247
Martin137419
Switzerland134311
Warren120616
Union106916
Ohio84212
Unassigned0538

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