Nissan board fires Ghosn as chairman
BOARD MEETING TO MUDDY THE WATERS FOR A FULL MERGER WITH FRENCH PARTNER RENAULT
Directors vote unanimously to dismiss powerful executive after hours-long meeting
While Nissan Motor Co.’s board voted unanimously to remove Carlos Ghosn as chairman, he will remain as a director ... for now.
This is because a shareholder vote is needed to remove him from the board completely. The Japanese carmaker won’t nominate an interim chairman, and its three independent directors will nominate a permanent chairman later on, a spokesman for Nissan said.
Ghosn, who was among the best-paid executives in both France and Japan, stands accused of under-reporting income of about $44 million (Dh161.61 million) and misusing company funds at Nissan. He is suspected of breaking the Financial Instruments and Exchange Law, and the alleged offence may carry a sentence of up to 10 years,
As per Japanese laws, the offence is even more serious than insider trading.
Business resentments
Before his surprise arrest in Tokyo on Monday, November 19, Ghosn had been preparing to push for a full merger of Nissan with French partner Renault SA, which he also heads as CEO and chairman.
Without Ghosn at the head of Nissan’s board, a merger looks very unlikely. The charismatic French-Brazilian executive was architect and linchpin of the two-decade-old alliance, created as an attempt to add heft against global rivals. His arrest has now laid bare resentments that have built as Japanese and French sides alternated successes and struggles over the years.
“It’s a coup,” said Tatsuo Yoshida, an analyst at Sawakami Asset Management, who used to work at Nissan. “Ghosn’s era is over.”
Lately, the Renault-Nissan structure has become increasingly controversial in Japan due to Nissan’s strong financial performance. Although it’s generally outgrown Renault in sales and profits, the Japanese company has far less influence within the alliance.
It owns a 15 per cent nonvoting stake in Renault, which in turn owns 43 per cent of Nissan, with voting rights. Mitsubishi Motors Corp. was added to the alliance in 2016.
Keeping the alliance
The unanimous vote by Nissan directors to oust Ghosn means the Renault representatives on the board also backed his removal. The French carmaker itself put in place new interim leadership earlier this week but declined to fire Ghosn, saying he should be presumed innocent until more details become available.
Interim Renault CEO Thierry Bollore said “the alliance is vitally important for Renault and we will ensure total continuity with our partners”.
The French side, conversely, has been keen to maintain — if not intensify — the current relationship. French Finance Minister Bruno Le Maire said on Wednesday that the partnership is set to continue and will be deepened. As Renault’s largest shareholder, France is “totally attached to the alliance of Renault and Nissan,” he said.
The Renault board said it was in the dark about details of the allegations. “At this stage, the board is unable to comment on the evidence seemingly gathered against Mr. Ghosn by Nissan and the Japanese judicial authorities,” it said earlier this week.