Nissan votes unanimously to fire Chairman Ghosn, ending two-decade reign

Friday, 23 November 2018 00:00 - - {{hitsCtrl.values.hits}}

YOKOHAMA, Japan/PARIS (Reuters): Nissan Motor Co.’s Board voted unanimously to oust Chairman Carlos Ghosn on Thursday after the shock arrest of the industry heavyweight, ushering in a period of uncertainty for its 19-year alliance with Renault.

French Renault Group CEO and Japan’s Nissan Motor Co. and Mitsubishi Motors Corp. Chairman Carlos Ghosn

The Japanese firm said its Board also voted to remove Greg Kelly – who, like Ghosn, has been arrested after allegations of financial misconduct – from his post as Representative Director.

The move, which leaves the Chairman position vacant, came despite Renault urging Nissan’s Board before its meeting to delay removing Ghosn, sources close to the matter told Reuters.

The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors, has been rattled to its core by the arrest of the 64-year-old Ghosn in Japan on Monday.

Ghosn had shaped the alliance and was pushing for a deeper tie-up, including potentially a full Renault-Nissan merger at the French Government’s urging, despite strong reservations at the Japanese firm.

Japanese prosecutors said Ghosn and Kelly conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual JPY 10 billion ($ 88 million).

Tokyo District Public Prosecutors Office Deputy Public Prosecutor Shin Kukimoto said on Thursday that court approval was received a day earlier to detain Ghosn for 10 days, but he could not comment on whether he had admitted to the allegations.

Nissan Executives have five seats on the nine-member Board, Renault loyalists have two seats, and the remaining two are held by unaffiliated outside Directors, a former bureaucrat and a race driver.

With Ghosn and Kelly still in detention, neither of the men were able to vote or defend themselves at the meeting.

Renault has refrained from firing Ghosn as Chairman and CEO.

But Mitsubishi Motors plans to remove Ghosn from his post of Chairman at a Board meeting next week.

Amid growing uncertainty over the future of the alliance, Japan’s Industry Minister and France’s Finance Minister are due to meet in Paris on Thursday to seek ways to stabilise it.

“For me, the future of the alliance is the bigger deal,” a senior Nissan official told reporters on Wednesday, when asked about Ghosn’s arrest. “It’s obvious that in this age, we need to do things together. To part would be impossible.”

Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Ghosn engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.

Ghosn and Kelly have not commented on the accusations and Reuters has not been able to reach them.

Prosecutors said Ghosn is being held at the Tokyo detention centre, which is known for its austere regime, a far cry from his usual luxury lifestyle, including restrictions on sleeping during the day and a requirement to wear a mask when meeting with visitors to prevent the spread of disease.