Nissan chief arrested after ‘hiding millions in pay to dodge tax’
A CAR industry chief was arrested yesterday amid claims he raided company funds and concealed bonuses to dodge tax.
In an extraordinary fall from grace, Carlos Ghosn, who is chairman and chief executive of Renault-Nissan, was detained by prosecutors in Tokyo.
Greg Kelly, who is the firm’s senior executive in the US, was also taken into custody. Nissan accuses the pair of masterminding financial crimes stretching back to 2011. They include under-reporting their pay to the Tokyo stock exchange by £34million over five years, in a suspected ploy to slash their tax bill.
Nissan chief executive Hiroto Saikawa said the company plans to dismiss the two men at a board meeting this week.
Numerous other ‘significant acts of misconduct’ were uncovered during an internal investigation, according to a statement issued by Nissan yesterday.
These include ‘misrepresenting’ the purpose of company investments and personal use of company assets. The scandal comes just months after Mr Ghosn’s £6.7million pay package from Renault for last year was narrowly approved by shareholders.
A French citizen born in Brazil and of Lebanese descent, he has been one of the car industry’s most powerful figures for almost 20 years, heading a firm that builds around one in nine vehicles sold around the world.
Its site in Sunderland is the UK’s biggest car plant, employing around 7,000 workers. He met David Cameron in Downing Street and two years ago Theresa May rolled out the red carpet to Mr Ghosn, inviting him to London to reassure him about Brexit.
As well as being courted by politicians, he has become a hero in Japan for rescuing Nissan and he is even celebrated in manga comics.
But yesterday he was arrested shortly after his plane landed at Tokyo’s Haneda airport. Prosecutors also raided Nissan’s offices. Mr Saikawa said he expected employees, dealerships and customers to feel anxious and bewildered, adding: ‘Beyond being sorry I feel disappointment and frustration. I feel despair and indignation and resentment.’
He said Mr Ghosn was given too much power in 2005 when he became chief executive of both Renault and Nissan – making him hard for board members to control. Mr Saikawa said he would now focus on stabilising the company. The revelations spooked investors, fuelling fears that the Renault Nissan pact could fall apart. As shares in Renault slumped more than 8 per cent, President Emmanuel Macron said the French government, which is a major shareholder, ‘will be extremely vigilant about the stability of the alliance’.
Mr Macron and Mr Ghosn visited a Renault plant together this month in northern France.
The alleged wrongdoing emerges as the car industry struggles to rebuild its reputation after the VW ‘Dieselgate’ emissions scandal.