In a shocking development, Carlos Ghosn, considered by many to be a living legend in the global automotive industry, has been arrested for misconduct in Japan. Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company’s Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly.
Nissan said in a statement: “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. 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.”
Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. It will continue to do so, it said in the statement.
“As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan’s Chief Executive Officer Hiroto Saikawa will propose to the Nissan Board of Directors to promptly remove Ghosn from his positions as Chairman and Representative Director. Saikawa will also propose the removal of Greg Kelly from his position as Representative Director,” the statement added.
Carlos Ghosn is Chairman of the Board of Nissan Motor Co., Ltd. He joined Nissan as Chief Operating Officer in June 1999 and served as CEO from June 2001 until April 2017 when he was succeeded by Hiroto Saikawa.
Philippe Lagayette, as lead independent director of Renault, in liaison with Board Committee Chairs Marie-Annick Darmaillac and Patrick Thomas, have acknowledged the contents of Nissan’s press release of today (November 19, 2018).
Pending provision of precise information from Carlos Ghosn, Chairman and Chief Executive Officer of Renault, the above directors wish to express their dedication to the defense of Renault’s interest in the Alliance. The Board of Directors of Renault will be convened very shortly.
Ghosn was the lead architect of the Nissan Revival Plan, which transformed the company from near-bankruptcy to profitability within two years. Under Mr. Ghosn's leadership, Nissan has had higher profit margins than many rivals and has expanded geographically - particularly to China, which is now one of Nissan's key markets by volume.
In addition to his responsibilities at Nissan, Ghosn was named CEO of Groupe Renault in May 2005, becoming the first person to run two global Fortune 500 companies simultaneously. In 2009, he added the title of chairman of the board. And in December 2016, he was named Chairman of the Board of Japan's Mitsubishi Motors Corp.
He is also Chairman and CEO of the Renault-Nissan Alliance, one of the world's largest automotive groups. Renault, Nissan, Mitsubishi Motors and AVTOVAZ together sold 9.96 million vehicles in 2016 – more than one in nine cars worldwide.