MercoPress. South Atlantic News Agency

Brazilian born Nissan boss arrested in Japan

Ghosn has been one of the best-paid executives among Japanese companies.

Japanese authorities have arrested Carlos Ghosn, chairman of the Nissan Motor Co., Renault SA and Mitsubishi Motors Corp., for allegedly understating his personal income on financial statements thus violating the country's financial law, it was reported Monday.

The Brazilian born Ghosn and his Representative Director Greg Kelly had been subject to a Nissan internal investigation which ”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,” the carmaker said in a statement.

Ghosn, a rare foreign top executive in Japan, is well-regarded for turning Nissan around from near bankruptcy. He arrived at Nissan in 1999 as chief operating officer to lead the company's recovery through a capital alliance with Renault.

Becoming president of Nissan in 2000, he took drastic restructuring measures with a management style that rattled conventional practices in the Japanese auto industry and led the alliance formed by Nissan, Renault and Mitsubishi Motors in the first half of 2018 to sell 5.54 million vehicles worldwide, up 5 percent from the same period last year, and surpassing major rivals Volkswagen, which also encompasses the Audi and Porsche brands.

But despite all that success “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 Nissan statement made clear.

“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,” the statement went on.

Ghosn is one of the best-paid executives among Japanese companies, a fact that has often been a target of criticism. Ghosn’s reported salary from last year fell by some 33 percent from 2016, to ¥730 million (around 6,5 million US dollars)
— the first time in four years that his salary had not stretched into at least ¥1 billion. In 2016, his salary was ¥1.09 billion and in 2015 he received ¥1.07 billion.

The statement also aimed at clearing the company's name, saying it had cooperated with prosecutors all along. “Nissan deeply apologizes for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures,” it said.