Carlos Ghosn, Nissan CEO, Arrested on Charges of 'Financial Misconduct'

Carlos Ghosn, the CEO of Nissan Motor Company, was arrested in connection with financial misconduct investigations, and the company announced on Monday that he would be dismissed due to false reporting regarding his income and misuse of company assets. Nissan stated in a press release on Monday, November 19, that Carlos Ghosn was interrogated and subsequently arrested by prosecutors early this morning upon his arrival in Japan. This is a significant event that will pose a major challenge for the automotive alliance of Nissan, Renault, and Mitsubishi. Nissan added that the allegations of financial misconduct against Carlos Ghosn and another executive, which involve millions of dollars, are the result of a month-long investigation following disclosures made by a company employee. Hiroto Saikawa, the CEO of Nissan, apologized for seven minutes at the beginning of his press conference to announce this matter, and then stated, "In addition to expressing regret, I feel a deep sense of disgust. We will try to minimize the negative impacts of this incident on the company and our business partners." Nissan stated that it has provided all evidence to the prosecutors and will fully cooperate with the investigation. Another executive named Greg Kelly has also been arrested in this case. Mr. Saikawa stated that Carlos Ghosn and Greg Kelly were the masterminds behind this financial misconduct, and the Nissan board meeting on Thursday will vote on their dismissal. He added, "This is a very serious violation, and our company will not tolerate such behavior." In another part of his press conference on Monday, the Nissan CEO stated that one of the main reasons for this situation was "the lack of transparency in part of the management practices and granting excessive powers to one individual." He added, "To accurately identify and rectify these deficiencies, further investigations need to be conducted, and one of the immediate actions we will take is to strengthen the role of the board in managing the company." Carlos Ghosn had 19 years of experience at Nissan and had signed a management contract extending to 2022 this year. He also became the CEO of Renault in 2005, managing both companies simultaneously. Following the announcement of this news, Renault's stock value in France dropped by about 14%. Mr. Ghosn's salary and benefits in Japan, which are generally not very high for senior executives, have been a topic of controversy in recent years. According to Japanese media, he received about $89 million from Nissan over the past five years but only reported half of his income, which is $44 million. The news of Carlos Ghosn's arrest was released after the Japanese stock market had closed, and its consequences in the country will likely become clear tomorrow.