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On November 19, Tokyo prosecutors arrested one of the auto industry's leading figures, Carlos Ghosn over allegations of understating his compensation and swindling money from Nissan for personal use.
At the time of his arrest, Ghosn was serving as chief executive of Renault, chairman of Nissan and chairman of the board at Mitsubishi.
Ghosn along with representative director Greg Kelly was taken into custody for failing to declare around $44 million on Nissan's security reports submitted over five years starting 2011.
Japanese broadcaster NHK reported that Nissan had established a Dutch venture capital investment subsidiary, which at Kelly's direction, purchased luxury residential properties in Ghosn's hometowns- Rio de Janeiro and Beirut. Carlos was allowed to use these properties at no cost.
The high-profile arrest of Ghosn, whose list of feats include reviving Renault, saving Nissan and re-energising the auto industry, tumbled the shares of Nissan by 6.5 percent in Tokyo, resulting in the biggest intraday decline for the Japanese automaker since November 2016. Shares of Mitsubishi Motors Corp. too plummeted, falling the most since its emission scandal came to light in 2016.
Japanese media also reported that the authorities have made a plea bargain deal with an unidentified person at Nissan. The deal, which reduces or gives immunity for those cooperating with investigations, would only be the second under the system after it was introduced in the country in June earlier this year.
In a statement, Nissan said that it will cooperate with Japanese prosecutors and their investigation into Ghosn after a whistle-blower tipped that the executive was misrepresenting his salary and using company assets for personal purposes.
In a late-night press conference in Yokohama, on the fringes of Tokyo, Nissan CEO Hiroto Saikawa stated that he would recommend Nissan board, which will meet on Thursday, to oust Ghosn, “Needless to say, this is an act which cannot be tolerated by the company,” he said.
Speaking at the 90-minute conference, Saikawa described both Kelly and Ghosn as “masterminds” of a long-running scheme to mislead financial authorities. He declined to give further details on the expected charges against the duo.
Renault, in a statement on November 19, stated that its board of directors would meet “as soon as possible” to reach a conclusion on Ghosn. Mitsubishi echoed a similar sentiment stating that it would look to remove Ghosn.
While the whereabouts of Ghosn remains unknown, he can be held in custody for up to 23 days without being charged under Japanese law.
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