19 Nov 2018; AFP: Nissan chairman Carlos Ghosn faces being fired this week after being arrested in Japan over allegations of financial misconduct, the firm said Monday, in a stunning fall from grace for one of the world's best-known businessmen.
Ghosn's arrest and his likely dismissal from Nissan, as well as possibly from Mitsubishi and Renault, sent shockwaves through the auto industry, where he is a towering figure, credited with turning around several major manufacturers.
Besides being chairman of Nissan, the 64-year-old is also CEO of Renault and leads the Nissan-Renault-Mitsubishi alliance.
Nissan's board will meet Thursday to decide his fate, and Mitsubishi said it would propose he be dismissed as chairman "promptly." Renault said its board would meet "shortly", after Ghosn was detained over allegations including underreporting his income.
At a hastily organised press conference, Nissan CEO Hiroto Saikawa expressed "despair," but also suggested that Ghosn had accrued too much power and eluded proper oversight.
"Too much authority was given to one person in terms of governance," he told reporters at Nissan's headquarters in Yokohama.
"I have to say that this is a dark side of the Ghosn era which lasted for a long time."
The news of Ghosn's downfall emerged unexpectedly on Monday evening, with local media first reporting he was being questioned by prosecutors and that Nissan's headquarters was being raided.
Shortly afterwards, Nissan said in a statement that it had been investigating Ghosn and Representative Director Greg Kelly for months after a whistleblower report.
"These two gentleman are arrested this evening, that's what I understand," Saikawa said at the press conference.
He said the company had uncovered years of financial misconduct including under-reporting of income and inappropriate personal use of company assets.
Saikawa gave few details about the nature of the improprieties, including refusing to confirm reports that Ghosn under-reported his income by 5 billion yen, or around $44 million, over five years from 2011.
He said an ongoing investigation limited what details could be shared, and refused to be drawn on whether other people were involved, saying only: "These two gentlemen are the masterminds, that is definite."
A Japanese judicial source told AFP that Ghosn could legally be held for up to 23 days but would possibly be freed on bail before then.
News of his arrest caused Renault shares to fall 8.43 percent in Paris trading. The reports emerged after the trading day was over in Tokyo.
The apparent disintegration of Ghosn's career raises questions about the alliance of the three car companies, which the Brazil-born executive was often believed to be holding together personally.
Saikawa insisted "the partnership among the three entities will not be affected by this event," but he was unable to give details on how Renault and Mitsubishi planned to respond, or who might succeed Ghosn.
