Carlos Ghosn guilty of 'serious misconduct', Nissan says

Greg Kelly joined the Nissan board in 2012. Pic Nissan Motor Co

Shares of Japan's second-largest auto manufacturer as well as France's Renault plunged following a report that Carlos Ghosn, Nissan chairman and chief executive of the Renault-Nissan-Mitsubishi alliance, was arrested on allegations of financial trading misconduct.

Brazilian-born Carlos Ghosn, 64, was arrested today after he voluntarily submitted to questioning by Tokyo prosecutors, according to reports in Japan.

YOKOHAMA, Japan Nissan Motor's chairman Carlos Ghosn has been arrested and will be dismissed for alleged under-reporting of his income and misuse of company funds, the company said Monday.

Nissan revealed that an internal investigation concluded that Ghosn allegedly under-reported his income and misused corporate assets.

Carlos Ghosn, chairman of Nissan and CEO and chairman of Renault, is set to be removed from Nissan after the auto company said it uncovered "significant acts of misconduct".

Japanese media reports suggest that Ghosn has been arrested in Tokyo in relation to the allegations, while Nissan has issued an official apology for the "great concern" that the situation has caused to its shareholders and stakeholders.

The company said it is co-operating with prosecutors' own investigation.

Director Greg Kelly was also found to have under-reported his compensation and had "deep involvement" in Ghosn's schemes, according to the company.

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He is Chairman and chief executive of the Renault-Nissan Alliance, one of the world's largest automotive groups.

In March, sources close to the matter told Reuters the alliance partners were discussing plans for a closer tie-up in which Nissan would acquire the bulk of the French state's 15 percent stake in Renault. A USA citizen who trained as a lawyer, Kelly joined Nissan's North American arm in 1988.

Ghosn's stature comes from having saved Nissan from near-collapse nearly two decades ago and spearheading a global expansion of its brands and production.

He said that because of the continuing investigation, he could not disclose many details.

Nissan's annual securities report shows Ghosn received annual remuneration exceeding $8.9 million until fiscal 2016, when shareholders voted against his pay package and his annual pay dropped to $6.5 million in 2017, down more than 30 percent.

Among the best paid executives in both Japan and France for several years, Ghosn's compensation has regularly drawn criticism. In 2016, Ghosn became Mitsubishi Motors' chairman.

Whether that's going to happen or not remains questionable at the moment, but reports suggest that Nissan CEO, Hiroto Saikawa, will recommend to the board of directors that Ghosn will be fired. It was also waiting for "precise information from Carlos Ghosn". That prompted the ire of then-President Francois Hollande.

Although the company denied a direct link between the failure to carry out proper testing and its ongoing efforts to cut costs, Chief Competitive Officer Yasuhiro Yamauchi acknowledged at the time that he "needed to reflect on whether there was an environment at Nissan in which anything could be tolerated if it led to cost-cutting".

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