Nissan has announced it will dismiss its chairman Carlos Ghosn after the businessman under-reported his income.

Mr Ghosn, who is also chief executive and chairman of Renault, is reported to be facing arrest in Japan following an internal investigation into his financial affairs at the car manufacturer.

The Japanese carmaker said its investigation – based on a whistleblower report – found that Mr Ghosn had falsified reports on his compensation “over many years”.

The investigation also found other instances of misconduct, including the personal use of company assets.

Nissan said it had provided information to prosecutors and was cooperating with their investigation.

Mr Ghosn has held high ranking roles at the Japanese car manufacturer for more than 20 years.

He was appointed as Nissan’s chief operating office in 1999, before going on to work as president and chief executive office. He was appointed chairman of the board in 2017.

Mr Ghosn is seen as the most powerful executive in the automotive industry having overseen alliances between Nissan, Renault and Mitsubishi. He is credited with the turnaround of Nissan from near bankruptcy.

The car giant’s investigation will also lead to the dismissal of representative director Greg Kelly.

The statement from Nissan said: “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.

“As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan’s Chief Executive Officer Hiroto Saikawa will propose to the Nissan Board of Directors to promptly remove Ghosn from his positions as Chairman and Representative Director. Saikawa will also propose the removal of Greg Kelly from his position as Representative Director.

“Nissan deeply apologizes for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.” </s> TOKYO – Japanese media reported Monday that prosecutors have added to charges against Nissan’s former chairman Carlos Ghosn, extending his detention following his arrest on Nov. 19.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn and another Nissan executive, Greg Kelly. A commission official said Monday that Nissan, Ghosn and Kelly were suspected of falsifying millions of dollars’ worth of Ghosn’s income. In Japan, a company can be charged with wrongdoing.

The prosecutors say Ghosn is suspected of underreporting his income by 5 billion yen ($44 million) over five years. The allegations newly reported on Monday would increase that amount by 4 billion yen ($36 million).

Some kind of action by the prosecutors had been expected because the detention period allowed for allegations disclosed earlier was to end on Monday.

More: Board of Japanese automaker Nissan fires Carlos Ghosn as chairman

More: Mitsubishi Motors fires Carlos Ghosn as chairman following arrest

Kelly, 62, is suspected of having collaborated with Ghosn. Kelly’s attorney in the U.S. says he is asserting his innocence.

Both men were dismissed from their managerial roles at Nissan following their arrests.

Ghosn was sent to Nissan by its partner Renault SA of France in 1999. He led a dramatic turnaround the near-bankrupt Japanese automaker. But Ghosn’s star-level pay has drawn attention since executives in Japan tend to be paid far less than their international counterparts.

Only Ghosn’s attorneys and embassy officials from Lebanon, France and Brazil, where he has citizenship, have been allowed to visit him.

More: Nissan's Carlos Ghosn reportedly used car maker's money to buy personal homes, pay sister </s> Nissan Motor’s board voted on Thursday to oust Carlos Ghosn from his post as chairman following his shock arrest this week, marking the stunning downfall of the executive once hailed as the saviour of the Japanese automaker.

The removal of Ghosn clouds the direction of the Renault-Nissan alliance, which he had personally shaped and pledged to consolidate with a deeper tie-up despite reservations at Nissan. Ghosn is also Renault’s chairman and chief executive.

The board also voted to remove Greg Kelly from his position as representative director, the Nikkei newspaper reported. Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Ghosn engaged in wrongdoing, including personal use of company money and under-reporting of his earnings for years.

Tokyo prosecutors have accused Ghosn and Kelly of financial misconduct and they remain in custody. Ghosn and Kelly have not commented on the accusations. A Nissan spokesman declined to comment. </s> Nissan Motor Company’s former chairperson Carlos Ghosn was arrested again on Friday on fresh allegations that he shifted $16.6 million, around Rs 116.10 crore, in personal investment losses to the company, Reuters reported. The re-arrest means he could be detained for at least 10 more days in jail.

Ghosn was arrested in Tokyo last month on charges of under-reporting his earnings. Ghosn – a French citizen of Lebanese descent who was born in Brazil – had played a major role in the formation of a strategic partnership between Nissan, its French partner Renault and Mitsubishi Motors.

The new arrest came a day after a court in Japan rejected prosecutors’ request to extend Ghosn’s detention. It also rejected a detention extension for the company’s former Representative Director Greg Kelly, who had also been arrested in November.

Ghosn is alleged to have shifted personal trades to Nissan in October 2008 in order to avoid paying 1.85 billion yen, or $16.6 million, in losses, according to the Tokyo prosecutor.

Hours earlier, Ghosn’s lawyer Motonari Otsuru had promised to restore his client’s reputation in court. “Things as they stand are absolutely unacceptable,” Otsuru said, on Ghosn’s behalf. “I want to have my position heard and restore my honour in court.”

On November 22, Nissan’s board of directors had dismissed him as chairperson. Japanese multinational automotive manufacturer Mitsubishi Motors had also dismissed Ghosn from the post, while Renault replaced Ghosn with a temporary deputy chief executive on the request of the French government. The French government holds 15% stake in Renault. </s> Carlos Ghosn, the powerful auto executive who recently lost his role as chairman of Nissan, has been formally indicted on charges that he underreported his income to Japanese authorities.

The Nissan Motor Co. as well as a top aide to Ghosn also were indicted, accused of assisting in the financial misconduct, state broadcaster NHK reports.

Ghosn, who was arrested and ousted as chairman after the allegations were made last month, was detained without charges for 22 days — the maximum length allowed under Japanese law.

But he's not tasting freedom yet. In addition to indicting him on Monday, authorities also served him a fresh arrest warrant, based on their belief that Ghosn's alleged fraud lasted longer than originally believed.

That will allow authorities to detain and interrogate Ghosn for three more weeks, Kyodo News Agency reports.

Ghosn was a titan in the automobile industry. He was venerated for orchestrating a remarkable turnaround at Nissan, which was edging near bankruptcy when he took the reins. And he simultaneously led Nissan, Renault and Mitsubishi, arranging the three companies into a powerful, successful alliance.

Mitsubishi removed Ghosn from his post as chairman after his arrest. But his future at Renault is not yet clear.

The case has brought international scrutiny to Japan's judicial system, which has a conviction rate of more than 99 percent after indictment.

France 24 spoke to lawyer and former prosecutor Nobuo Gohara about the factors driving that astonishing figure.

" Few judges are willing to deliver an innocent verdict. And this has led to some false convictions," he said. "The biggest problem is the so-called hostage-based criminal justice system. Suspects who insist on their innocence tend to remain in custody for a long time. This is linked to Japan's high confession rate, and the assumption that a suspect who denies wrongdoing deserves to suffer disadvantage."

Even a high-profile scandal involving prosecutors caught tampering with evidence has not led to real reforms, Gohara says.

Last month, The Wall Street Journal published an editorial saying Ghosn's arrest "ought to trouble anyone concerned with due process and corporate governance in Japan."

The Journal asked why Nissan wasn't aware of the alleged financial misconduct earlier, why the "publicly available facts" are so opaque, and why this case is being handled much more aggressively than recent accounting scandals at Toshiba and Olympus.

Both the Journal and Gohara also criticized the Japanese media, which regularly publishes leaked details about alleged criminal behavior, and has continued to do so in Ghosn's case. </s> Japanese automaker Nissan Motor Co.'s influential chairman Carlos Ghosn was fired and arrested Monday after an internal probe found he underreported his salary and for other financial violations, including the personal use of company assets, the firm and Japanese state media said.

Nissan said in a statement that Ghosn would be dismissed after an internal probe based on a whistleblower report found he had falsified reports "over many years."

Japan's state broadcaster NHK said Ghosn was later arrested Monday on suspicion of financial misconduct. The news was announced after Japan’s financial markets closed, meaning Nissan's Japan-listed stock price was not immediately affected.

However, shares in French carmaker Renault, Nissan's longtime partner, fell 14 percent in European trading, to 55.61 euros – their largest drop in over three years.

Brazilian-born Ghosn, 64, is a huge figure in the global auto industry.

He helped turn around Renault and Nissan and push them into electric cars. Ghosn is chairman and CEO of the Renault-Nissan-Mitsubishi alliance and CEO of Renault.

Renault was not available for comment on the allegations.

Another senior Nissan executive, American Greg Kelly, was also dismissed.

Neither Ghosh nor Kelly could be reached directly for comment.

"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 in its statement. "Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly's deep involvement has also been confirmed." </s> YOKOHAMA, Japan — Nissan Motors said Monday that chairman Carlos Ghosn has been arrested and will be dismissed after the company uncovered “significant acts of misconduct,” including underreporting his own salary and using company assets for his personal benefit.

Ghosn is considered one of the car industry’s top executives and is one of the most highly paid corporate bosses in Japan. He is widely credited with having saved Nissan from near-bankruptcy. He also serves as chairman and chief executive of France’s Renault and chairman of Mitsubishi Motors.

Brazilian-born, of Lebanese descent and a French citizen, he is one of the few foreigners in such a senior position in Japan.

Nissan said it conducted an internal investigation for several months based on a report from a whistleblower regarding misconduct by Ghosn and Representative Director Greg Kelly. It shared its findings with public prosecutors for their own parallel investigation.

“I am not in a position to talk about the progress of the investigation itself, but as a result of the investigation, we heard that the arrests have been made of the two gentlemen,” CEO Hiroto Saikawa told a news conference in the company headquarters in Yokohama.

Saikawa would said he would convene a meeting of the board on Thursday to remove Ghosn and Kelly.

Nissan said its investigation showed numerous “significant acts of misconduct,” including underreporting Ghosn’s compensation to the Tokyo Stock Exchange to the tune of more than $40 million over five years. It also said he used investment funds for personal gain and misused company expenses.

Nissan said Kelly was also deeply involved in the wrongdoing. Saikawa described both men as the masterminds of the alleged misconduct.

Renault shares tumbled nearly 10 percent in Paris, while Nissan’s German-listed securities fell by a similar amount.

Ghosn, 64, began his career at tiremaker Michelin in France in 1976 before moving on to Renault in 1996. There he helped engineer a turnaround in the carmaker’s fortunes that earned him the admiration of the business world but not of labor unions or leftist politicians, who resented his high salary while he presided over massive job losses in the wake of the global financial crisis.

He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO from 2001 until 2017, engineering a similar turnaround there and earning the nickname “Le Cost Cutter.”

Ghosn stepped down as Nissan CEO last year but remained chairman of the company.

He became a star in the business world in Japan, appearing on magazine covers dressed in a kimono and even spawning a manga comic book on his life, although he also attracted more criticism there for his high salary.

Ghosn was one of the first executives to champion electric cars, and he also developed a range of low-cost cars for emerging markets.

In June, Renault shareholders approved Ghosn’s $8.5 million compensation for 2017. He also received the equivalent of more than $10 million in his final year as Nissan chief executive.

The scandal also raised eyebrows in France, where the French government is a major shareholder in Renault. Amid mounting controversy, Finance Minister Bruno Le Maire said Monday that the government would not comment on the ongoing judicial investigation in Japan but has already made inquiries with Renault about the company’s management structure.

In a late-night news conference lasting about 90 minutes, Saikawa, the Nissan CEO, did little to hide his anger at Ghosn for letting the company down.

“The concentration of power in one individual,” as well as Ghosn’s “long reign” at the automaking conglomerate, impacted operations and could have been factors in allowing the misconduct to take place, he said.

“People who reported to Mr. Ghosn became limited in number,” Saikawa said. As a result, instead of taking decisions based on a range of information and opinions, Ghosn “made decisions based on limited input in some cases.”

Saikawa also spent considerable time expressing his deep regret over the “bewilderment and anxiety” that the news has caused employees and stakeholders.

“It’s very difficult to express this in words,” he said. “Beyond being sorry, I feel big disappointment and frustration and despair and indignation and resentment.”

In its statement, Nissan also deeply apologized for causing great concern to shareholders and stakeholders. “We will continue our work to identify our governance and compliance issues, and to take appropriate measures,” the company said.

The news is the latest scandal to sully Nissan’s brand. In July, it acknowledged it had uncovered falsified emissions data from most of its factories in Japan, while in 2017 it admitted it had allowed unqualified personnel to carry out postproduction tests at some of its plants, forcing it to recall more than a million vehicles for reinspection.

Although the company denied a direct link between the failure to carry out proper testing and its ongoing efforts to cut costs, Chief Competitive Officer Yasuhiro Yamauchi acknowledged at the time that he “needed to reflect on whether there was an environment at Nissan in which anything could be tolerated if it led to cost-cutting.”

Tim Hubbard, assistant professor of management in the University of Notre Dame’s Mendoza College of Business, said Ghosn’s arrest complicates a highly interconnected set of relationships between Nissan, Renault and Mitsubishi Motors — and could impact the equity stakes they have in each other.

“This has widespread implications for a large portion of the auto industry, as these alliances have become more critical in the increasingly interconnected design, manufacturing and support of auto customers worldwide,” he said. “Ghosn’s arrest is another unfortunate example of the perils of having too much power concentrated in one individual within — and across — corporations.”
• Tesla: You may soon ‘Summon’ your car like your pet One of the puzzles was why Ghosn, with all his wealth, might have wanted to defraud his own company, if the accusations are true.

“It seems very short-sighted to me, when you have that much money, why you would want to nickel-and-dime the company and shareholders,” said Carl Tobias, a professor at the University of Richmond’s law school.

Tobias said that if the alleged transgressions had occurred in the United States, someone like Ghosn, who could afford the best legal counsel available, might have been able to strike a deal with prosecutors to avoid jail time by paying a large fine. But he said it was far from clear whether this would be the case in Japan.

The Washington Post’s Akiko Kashiwagi in Tokyo and James McAuley in Paris contributed to this report. </s> Former Nissan chairman Carlos Ghosn, another executive and the carmaker itself have been charged by prosecutors in Tokyo with under-reporting income.

The charges imposed on Monday involve allegations Ghosn’s pay was under-reported by about five billion yen (£34 million) over five years.

The prosecutors had said earlier that the allegations were behind Ghosn’s November 19 arrest.

They added a new set of allegations on Monday against Ghosn and another executive, Greg Kelly, of under-reporting another four billion yen (£28 million) for more recent years.

Nissan as a company was not mentioned in the latest allegations.

In Japan, a company can be charged with wrongdoing.

Some kind of action by the prosecutors had been expected because the detention period allowed for the allegations disclosed earlier was to end on Monday.

Kelly, 62, is suspected of having collaborated with Ghosn.

Kelly’s lawyer in the US said he is asserting his innocence.

He has been ousted as Nissan chairman and Kelly lost his representative director title following their arrests, but they both remain on the board.

Ghosn, 64, was sent to Nissan by its partner Renault SA of France in 1999 and led a dramatic turnaround of the near-bankrupt Japanese carmaker.

But Ghosn’s star-level pay drew attention since executives in Japan tend to be paid far less than their international counterparts.

Only Ghosn’s lawyers and embassy officials from Lebanon, France and Brazil, where he has citizenship, have been allowed to visit him.

Nissan said in a statement: “Nissan takes this situation extremely seriously. Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret.”

The statement said Nissan would work to improve its corporate governance and compliance, “including making accurate disclosures of corporate information”.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn, Nissan and Kelly.

A commission official said on Monday that Nissan, Ghosn and Kelly were suspected of falsifying reports on millions of dollars’ worth of Ghosn’s income. </s> TOKYO - Prosecutors re-arrested former Nissan boss Carlos Ghosn over fresh allegations on Friday, apparently dashing his hopes of an early release in the latest twist to a rollercoaster saga.

The case of the once-revered 64-year-old tycoon has gripped Japan since he was arrested completely out of the blue as he stepped off his private jet at Tokyo’s Haneda Airport on 19 November.

And in another unexpected development, Ghosn was arrested on Friday on suspicion of transferring losses from personal financial investments to Nissan, causing damage to the company’s assets, according to a statement from prosecutors.

He has already been formally charged with under-reporting his income by tens of millions of dollars over several years and faces a second batch of allegations that this continued for three further years.

However, the auto baron had had his hopes raised of being freed on bail after a court rejected a bid by prosecutors to extend his detention over the second set of allegations.

But this fresh arrest gives prosecutors 48 hours to question him on the new matter - possibly extended beyond that.

Since his stunning arrest last month, the once jet-setting executive has languished in a tiny cell in a detention centre in northern Tokyo, where he has complained about the cold and the rice-based menu.

His lengthy detention - in Japan, suspects can be “re-arrested” several times over different allegations - has sparked criticism, especially from abroad.

Ghosn has an unusually high profile for a foreign executive in Japan and was credited with turning around the struggling car giant Nissan and forging a three-way alliance with French manufacturer Renault and fellow Japanese firm Mitsubishi Motors.

He was seen as the glue holding together the fractious alliance and his arrest has exposed major rifts between Nissan - which makes the most money - and Renault, the dominant shareholder.

According to local media, Ghosn has admitted signing documents to defer part of his salary until after retirement but said this amount did not need to be declared as it had not yet been definitively fixed.

The suspicion is that he sought to defer part of his pay to avoid criticism from staff and shareholders that his salary was too generous.

Both Nissan and Mitsubishi Motors promptly sacked Ghosn as chairman following his arrest, on the basis of a months-long internal Nissan investigation.

Renault has been much more cautious, keeping him on as chairman and CEO and appointing Thierry Bollore as interim boss.

In addition to charges against Ghosn and Kelly, prosecutors have also indicted Nissan, as the company submitted the official documents that allegedly under-reported his income.

On Thursday, the company pointedly declined to comment, saying it was “exclusively between the court and the prosecutors”.

It said the decision to fire Ghosn was “based on the substantial and convincing evidence” from an internal investigation.

“Both Ghosn and Kelly have violated their director duty of care,” the firm added in a statement.

Nissan has also accused its former boss of other financial impropriety, including using Nissan funds to purchase luxury homes around the world.

One of these - a luxurious, 800-square-metre spread with ocean views over Rio de Janeiro’s famous Copacabana Beach - has become the subject of a legal battle.

Last week, Ghosn family members entered the flat, removed “personal effects” and opened the safes, according to Nissan. This followed a court order giving Ghosn’s representatives' access despite objections from the Japanese firm.
Nissan chairman and former CEO Carlos Ghosn is arrested in Japan for breaching the country's financial trading laws, prompting Nissan to recommend that he and director Greg Kelly step down for misconduct. Ghosn is also the chairman and CEO of Renault.