Japan | Nissan’s Ghosn arrested after probe for financial violations

Nissan Motor Co. Chairman Carlos Ghosn has been arrested over suspected financial violations, the NHK reported, and the carmaker said it will seek a removal of the industry icon as its chairman after an investigation into his alleged misconduct.

Ghosn, among the most prominent auto-industry leaders globally and also the Chief Executive Officer of Renault SA, was detained over a suspected breach of Japanese financial law, NHK said. Based on a whistleblower tip, Nissan has been doing an internal investigation over the past several months into suspected financial misconduct involving Ghosn and director Greg Kelly, the company said yesterday. Nissan seeks to remove both Ghosn and Kelly.

“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. “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 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.

The company 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 French carmaker fell as much as 15 percent in Paris, while Nissan global depository receipts sank more than 11 percent.

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 (USD10 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.

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. Ma Jie, Bloomberg