Japan’s Nissan Motor Co.’s board has unanimously voted to fire Chairman Carlos Ghosn based on allegations that Ghosn misused company money to enrich himself and members of his family. Last week, Ghosn, who heads the Renault-Nissan-Mitsubishi Alliance, was arrested for alleged financial improprieties. In a statement made to the Tokyo Stock Exchange, Nissan said that an investigation into Ghosn’s behavior uncovered misuse of company investment funds and expense money for personal gain, as well as under-reporting $44.6 million in income from 2011 to 2015. Analysts are calling it a dramatic fall for a leader once hailed for rescuing Nissan from near-bankruptcy.
A second Nissan executive, Greg Kelly, was arrested as a collaborator in financial misdeeds. Nissan’s board consists of nine members, including Ghosn and Kelly. The seven other board members voted at the meeting, including two members from Nissan and two from Renault.
“Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company’s Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly,” read Nissan’s statement. “The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation.”
Nissan said that it has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. The company stated that the misconduct was uncovered through an internal investigation, which was instigated due to a tip-off by a whistleblower.
Ghosn is also the chairman and chief executive of Nissan’s French partner Renault and his departure will raise questions about the future of the alliance. Nissan has apologized to shareholders and stakeholders, noting that there was too much power concentrated in the hands of Ghosn, a rare foreign executive in Japan.
“To have so greatly violated the trust of many, I feel full of disappointment and regret,” Nissan CEO Hiroto Saikawa said at a news conference. “It’s not just disappointment, but a stronger feeling of outrage, and for me, despondency.”