Nissan chairman Carlos Ghosn has been arrested for misconduct, as the company says an internal investigation revealed that he and another top executive guilty of “significant acts" over the years.
Ghosn, who has worked in the auto industry for over 40 years, and another board member named Greg Kelly, were arrested on suspicion of violating financial laws by filing false statements and under-reporting Ghosn's income by about 5 billion yen ($44 million) over a five-year period ending in March 2015.
They have also been accused of personal use of company assets, per The Nikkei, which reported that a Dutch subsidiary established by Nissan for the purpose of venture capital investments was used by Kelly to purchase luxury residential properties in Ghosn's hometowns of Rio de Janeiro and Beirut for Ghosn to use at no cost.
According to Nissan, it had been investigating Ghosn and Kelly for months following a whistleblower report. It expressed its deep apologies for causing great concern to its shareholders and stakeholders and stressed that will continue its work to identify its governance and compliance issues and to take appropriate measures.
"These two gentlemen were arrested this evening, that is what I understand," Hiroto Saikawa, the chief executive officer at Nissan said at a press conference in Tokyo on Monday night, adding that he is proposing to Nissan's board of directors to "promptly remove Ghosn from his positions as chairman and representative director”, as well as removing Kelly from the board.
Ghosn is also chairman and chief executive of the Renault–Nissan–Mitsubishi Alliance, which he helped to form, as well as the chairman of Mitsubishi Motors and the chairman and chief executive of Renault.
He joined Renault in 1996 and became Nissan’s chief operating officer in 1999 after both companies formed an alliance. He was promoted to chief executive of Nissan two years later and took on the dual role of Renault chief executive in 2005. After Nissan took a 34% stake in Mitsubishi Motors in 2016, the Brazilian stepped down from his chief executive role at Nissan to make way for Saikawa.
All three companies’ share prices dropped after the revelations and arrests.
As reported by CNN, the president of France, Emmanuel Macron said during a visit to Belgium that the French government, which owns 15% of Renault, is concerned with the arrests. "The state, as a [Renault] shareholder, will be extremely vigilant regarding the stability of the alliance and the group," said Macron.