Nissan chairman arrested

Tokyo police swoop on auto industry giant Ghosn

NISSAN chairman Carlos Ghosn was arrested in Tokyo on Monday night and will be fired for allegedly underreporting his income and misusing company funds.

The scandal reverberated across the globe and abruptly threw into question Ghosn’s future as leader of the Renault Nissan-Mitsubishi alliance, which sold 10.6 million cars last year, more than any other manufacturer. Nissan CEO Hiroto Saikawa said Ghosn was taken into custody after being questioned by prosecutors upon arriving in Japan earlier in the day. Ghosn is of French, Brazilian and Lebanese background and lives in both France and Japan.

Nissan said Ghosn, 64, and another senior executive, Greg Kelly, were accused of offences involving millions of dollars that were discovered during a lengthy investigation set off by a whistleblower. Kelly was also arrested.

“Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,” Mr Saikawa said, apologising for a full seven minutes at the outset of a news conference.

Yokohama-based Nissan Motor said it was co-operating with prosecutors.

Mr Saikawa said Nissan’s board would vote tomorrow on dismissing Ghosn and Kelly.

He said three major types of misconduct were found: underreporting income, using investment funds for personal gain and illicit use of company expenses.

Ghosn (pictured) officially still leads the Renault-Nissan Mitsubishi alliance as CEO and chairman. But it is unlikely he will be able to stay on there or at Renault, where he is also CEO. Renault said its board would hold an emergency meeting soon.

“The last thing one of the world’s biggest automakers needs is the disruption caused by an investigation into the behaviour of a man who has towered over the global auto sector,” said Michael Hewson, chief market analyst at CMC Markets in London.

The companies in the alliance own parts of each other and share investments in new technologies, among other things. Renault owns 43 per cent of Nissan, which owns 15 per cent of Renault and 34 per cent of Mitsubishi.

Ghosn was at Nissan for 19 years and signed a contract this year that would have run through 2022. His compensation, high by Japanese standards, has been a source of controversy over the years.

Nissan reportedly paid Ghosn nearly 10 billion yen ($89 million) over five years through March 2015.