Sunday , May 22 2022

Nissan entered after Ghosn was arrested for alleged financial irregularities


Nissan Motor Co.'s shares fell more than 6 percent Tuesday as the arrest of President Carlos Ghosn made a day earlier shocks through the business world and aroused suspicion about the future of Japanese car number 2 and its global alliance.

Nissan said on Monday that an internal investigation that triggered a warning from a single applicant revealed that Ghosn had engaged in criminal offenses, including the personal use of company money and insufficient reporting over the years he earned. He was arrested and this week will be emptied out of the Nissan committee, it says.

Ghosn is also chairman and chief executive of Nissan's French partner Renault and chairman of the Japanese Mitsubishi Motors Corpus, the third partner in the alliance.

The expulsion of Ghosn will ask questions about the alliance he personally formulated and promised to consolidate with a deeper link before he could possibly give up on operational leadership.

It also focuses on the future of Nissan, the largest partner in the Alliance – at the time of the decline in profits due to poor sales in the United States and is facing increasing competition from competitors who invest heavily in new growth areas such as the Internet related cars and vehicles that are only used.

Gosnov's alleged injustice also raises issues related to governance in an alliance in which the boards of three partners are chaired by one executive director.

Speaking at a news conference Monday, Executive Director of Nissan Hirota Saikava acknowledged that too much power was concentrated on Ghosen and that the implications of his leadership both Renault and Nissan became undisputed since 2005.

The prosecutors announced in a statement that Ghosn and the director of the Greg Kelli office agreed that within five years, starting from the fiscal year 2010, they neglected Gosn's compensation of about half of the real 9.998 billion yen ($ 88.9 million).

Ghosn joined Nisan in 1999 and became its General Manager in 2001. He stayed there until last year and received 9.2 million euros ($ 10.53 million) in the last year's pay as CEO.

PHOTO PHOTO: Carlos Ghosn, President and CEO of Renault-Nissan-Mitsubishi Alliance, answers the question about the new venture capital fund at the round table with reporters at CES in 2018 in Las Vegas, Nevada, USA on January 9, 2018. REUTERS / Steve Marcus / File Photo

"By reducing his corporate payoff, he essentially deprived Nissan's stockholders of the ability to assess whether his earnings are appropriate," said Toru Ibaiashi, Executive Director of wealth management at UBS Securities Japan, about Nissan's claims.


Japanese public service NHK has announced that Nissan has paid billions of yen for buying and renovating Ghosn houses in Rio de Janeiro, Beirut, Paris and Amsterdam, citing unnamed sources.

The facilities did not have any business purpose and were not listed as a convenience in submissions for the Stock Exchange in Tokyo, NHK said. Saikava's executive director refused on Monday to discuss the specifics of Ghosn's personal use of the company's money.

Nissan has spent 2 billion yen in homes for Ghosn in Rio and Beirut over the Dutch subsidiary, and Kelly oversaw the transaction, the Nikkei daily reported, citing unnamed sources.

There were no comments from Ghosn or Kelly about allegations, and Reuters could not contact them for comments.

In the wake of widespread political downfall, Hitoshi Kawaguchi, senior vice president of Nissan dealing with government relations, met on Tuesday with a Japanese gunman, telling the media that he was looking for good relations between Japan and France.

The Asahi newspaper quotes unnamed sources saying that the employee of the company gave information to Ghosn on information about Ghosn in exchange for easier treatment, the second instance of a plea agreement in Japan – a system introduced in June.

Nissana shares fell to a two-year minimum of 940 yen and later traded from 5% to 955 yen.

The Nissan logo is seen at the top of Nissan's global headquarters. in Yokohama, Japan on November 19, 2018. REUTERS / Issei Kato

Mitsubishia shares, which also said on Monday that they would remove Ghosn as their president, slipped by about 6 percent. Renault's shares on Monday lost 8.4 percent.

The failed Ghosn is unlikely to lead to a sharp drop in car sales, which will reduce the loss of its shares, said Fujio Ando, ​​advisor to Chibagin Securities.

"The fact that the case came to light for warnings is also positive in general, in terms of corporate governance. If it were discovered by outsiders, that would be another story," he said.

Reporting by Chang-Ran Kim and Sam Nussei; Additional reporting by Hideiuki Sano, Aiai Tomisava and Villiam Mallard; Editing would be Stephen Coates and Muralikumar Anantharaman

Our standards:Thomson Reuters Trust Principles.
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