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Nissan Chairman Carlos Ghosn Arrested in Japan, Expected to Be Fired

Car and Driver logo Car and Driver 11/19/2018 Clifford Atiyeh
Carlos Ghosn wearing a suit and tie: Superstar auto CEO Ghosn has been arrested in Japan for financial irregularities, along with an alleged co-conspirator.© Provided by Car and Driver Superstar auto CEO Ghosn has been arrested in Japan for financial irregularities, along with an alleged co-conspirator.

Carlos Ghosn is all but gone from Nissan. The high-profile Renault, Nissan, and Mitsubishi chairman and Renault CEO was arrested Monday in Tokyo and charged with underreporting his income in corporate filings, according to Japanese broadcaster NHK.

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Nissan said a whistleblower tip launched an "internal investigation over the past several months" regarding improper conduct involving Ghosn and Greg Kelly, a high-ranking board member with the power to sign contracts on behalf of the company. Their investigation, in conjunction with the Japanese Public Prosecutors Office, found that both men underreported their compensation in Tokyo Stock Exchange filings "over many years," Nissan said in a statement. According to NHK, for the total of the past five fiscal years ending in March 2015, Ghosn reported "less than five billion yen" ($44 million at today’s rates) when it was actually almost twice that amount. Without elaborating, the company also alleged Ghosn took advantage of "company assets" for his personal use. CEO Hiroto Saikawa is calling on the board to immediately oust both executives from the company, wiht a meeting scheduled for Thursday.

Ghosn, who is also chairman of Mitsubishi Motors and CEO and chairman of Renault, joined Nissan when it was nearly bankrupt in 1999. At that time, Renault purchased a 37 percent stake in the struggling Japanese automaker and Ghosn, then also an executive vice president at the French automaker, took over as Nissan’s chief operating officer. As CEO in 2001, his Nissan Revival Plan quickly flipped the company back into the black with higher margins and expanding sales in China. While increasing low-cost models in emerging markets, including reviving the Datsun brand, Ghosn-who became CEO of Renault in 2005-also pushed Nissan into expensive battery-electric vehicles well before most mainstream automakers. He is also credited with backing quirkier, low-volume models like the Murano CrossCabriolet, a convertible SUV. Ghosn stepped down from the CEO position in 2017 but maintained his chairman title.

Ghosn’s trio of titles, along with the structure of the Renault-Nissan-Mitsubishi Alliance itself, is a rarity in the automotive industry. Renault currently owns 43 percent of Nissan, while Nissan owns 15 percent of Renault and 34 percent of Mitsubishi. Ghosn has been reportedly working to merge the three companies into a single corporation.
 

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