Nissan chairman held for financial misconduct

Nissan Motors chairman and CEO Carlos Ghosn. Pic/AFP

Nissan chairman Carlos Ghosn, one of the world's best-known businessmen, was reportedly under arrest in Japan on Monday in a shocking fall from grace linked to allegations of financial misconduct. The news sent shockwaves through the auto industry, where Ghosn is a towering figure who is credited with turning around several major manufacturers and leads an alliance of Nissan, Renault and Mitsubishi.

Japan's public broadcaster NHK and other media outlets said Ghosn had been arrested after being questioned by Japanese prosecutors for various improprieties including underreporting his income. Nissan said it had been investigating its chairman for months and would now move to fire him. In a statement, Nissan said it had been conducting a probe into Ghosn for several months after receiving a whistleblower report and had uncovered misconduct going back several years. The Tokyo prosecutor's office had no comment on the reports about Ghosn. Nissan said it had launched an investigation into both Ghosn and Representative Director Greg Kelly several months ago.

"The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Ghosn's compensation," the statement said, adding, "Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly's deep involvement has also been confirmed."

The company said it had provided information to Japanese prosecutors and would propose to the board of directors that it "promptly remove Ghosn from his positions" along with Kelly.

Saved Nissan from bankruptcy
Carlos Ghosn is credited with saving Nissan from bankruptcy through a series of hardnosed measures including closing plants and restructuring, and he has instant name recognition in Japan, where he is a rare, high-profile foreign executive. Ghosn has been regarded as the glue holding together the sprawling alliance of Nissan, Renault and Mitsubishi, and questions have been raised in the past about how his eventual departure might affect the coalition.

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