Nissan to Seek Ghosn Removal After ‘Significant Misconduct’

(Bloomberg) -- Nissan Motor Co. said it will seek the removal of Carlos Ghosn after uncovering serious acts of misconduct by the chairman, who is set to be arrested in Tokyo for violating financial trading law, according to Japanese media reports.

Ghosn, among the most prominent car-industry leaders globally and also the Chief Executive Officer of Renault SA, has been arrested over the suspected breach of Japanese financial trading law, the Yomiuri reported. Nissan has been conducting an internal investigation over the past several months regarding misconduct involving Ghosn and director Greg Kelly, the Japanese automaker said in a statement Monday.

“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 Carlos Ghosn’s compensation,” Nissan said.

The company said it has been providing information to the Japanese prosecutors and is cooperating fully with their investigation. Ghosn voluntarily went with Tokyo prosecutors, Asahi reported.

Nissan is set to hold a press conference at 9 p.m. in Tokyo. A representative for the Tokyo prosecutors said they don’t comment on individual cases.

A spokesman for Renault declined to comment. Shares of the carmaker fell as much as 14 percent in Paris, while Nissan global depository receipts sank more than 11 percent.

Among the most prominent car-industry executives globally, Ghosn, 64, built the three-way union of Renault, Nissan and Mitsubishi Motors Corp. He said in September that he will continue to pare back his roles at the three individual companies, while continuing to head their alliance.

A spokesman for the France’s finance ministry declined to comment on the report. The country owns about 15 percent of Renault and supported Ghosn’s renewal at the helm of the French automaker.

Among the best paid executives in both Japan and France for several years, Ghosn’s compensation has regularly drawn criticism. Ghosn receives numerous paychecks in his multiple roles as chairman of the Renault-Nissan-Mitsubishi alliance, CEO of Renault, and chairman of both Nissan and Mitsubishi.

At Nissan, he was paid about 1.1 billion yen ($10 million) for 2016 and about $6.5 million in the most recent fiscal year. He took home about $8.5 million at Renault and about $2 million from Mitsubishi in the latest period. At Renault, his package for 2017 was narrowly passed by Renault shareholders, but only after he agreed a 20 percent reduction.

Nissan to Seek Ghosn Removal After ‘Significant Misconduct’

Ghosn has been contemplating his career moves as the companies plan to change the pact’s structure, possibly through a merger. Ghosn gave up his role as CEO of Nissan last year and has said that he may step down as CEO of Renault before his four-year term ends in 2022, fueling speculation the alliance could lose its architect and main leader for the past two decades.

The carmakers have given themselves two years to decide on a possible merger between them or find an alternative mechanism to enhance their partnership, Bloomberg News reported in July. Ghosn said in September that the companies will “clarify everything” within the first half of his current Renault CEO term.

©2018 Bloomberg L.P.