Nissan could face charges over Ghosn case

Board will decide today whether to remove him as chairman after charges of financial impropriety

The crisis at Nissan deepened yesterday as it emerged that the Japanese car giant could itself face charges over the alleged financial misconduct that led to the stunning arrest of its chairman Carlos Ghosn.

Monday’s arrest of the millionaire auto tycoon, who is credited with turning around the Nissan-Renault-Mitsubishi Motors alliance, sent shock waves through the global car sector and corporate Japan.

The Asahi Shimbun daily said yesterday that Tokyo prosecutors believe Nissan also has a case to answer in the underreporting of Ghosn’s package by about five billion yen ($44.5 million; Dh163.45 million) over four years. Both Nissan and authorities declined to comment on the report.

Nissan’s board will decide today whether to remove the 64-year-old tycoon as chairman, a staggering reversal of fortune for the Brazil-born businessman credited with creating the three-way alliance The case — the latest in a string to affect Japan Inc — wiped millions off the stock value of all three companies but Nissan bounced back marginally in opening Tokyo trade, climbing more than half a percentage point in a falling market.

Carlos Ghosn was once the darling of the corporate world in Japan — even having a manga comic inspired by him — and has been the glue holding the auto tie-up together since 1999.

“Ghosn is likely the most successful foreign chairman in Japan,” said Kosuke Sato, a senior economist at the Japan Research Institute. “What he did was unprecedented in Japanese corporate history.” which together sells more cars worldwide than any other automaker.

Ghosn’s fate appears all but sealed after his hand-picked replacement as CEO, Hiroto Saikawa, launched an astonishing broadside at his mentor, saying “too much authority” had been placed in his hands and lamenting the “dark side of the Ghosn era.”

He pointedly refused to offer the deep “apology bow” that usually accompanies corporate scandals in Japan and played down the role Ghosn had personally played in reviving the firm’s fortunes.

However, in France, Renault said it was sticking with the fallen manager as chief executive although it named chief operating officer Thierry Bollore as deputy CEO, handing him the “same powers” as the “temporarily incapacitated” Ghosn.

After an emergency board meeting, Renault urged its sister company Nissan to share “evidence seemingly gathered” against Ghosn from a monthslong internal investigation, saying it was unable to comment on the charges without this information.

Paris and Tokyo have been scrambling to contain the fallout from the arrest, with the finance ministers of both countries declaring strong support for “one of the greatest symbols of Franco-Japanese industrial cooperation.”

turnover recorded by Japanese automaker Nissan last year, compared to the $67 billion by alliance partner Renault

Ghosn is likely the most successful foreign chairman in Japan. What he did was unprecedented in Japanese corporate history.” Kosuke Sato | senior economist at the Japan Research Institute

‘Le Cost Cutter’

Ghosn had a reputation as a workaholic and won the nickname ‘Le Cost Cutter’ in France for his slash-and-burn approach to corporate restructuring.

Under his stewardship, Nissan and Renault became deeply entwined.

Renault owns 43 per cent of Nissan while in turn the Japanese firm has a 15-per cent stake in Renault.

Nissan has become the alliance’s key player however, posting sales of 12 trillion yen ($106 billion) last year compared with Renault’s ₤59 billion ($67 billion; Dh247.35 billion).