Carlos Ghosn, chairman and CEO of Renault and chairman of Nissan, was arrested in Japan on Nov. 19 in for alleged financial misconduct. Ghosn, 64, was taken into custody on suspicion of underreporting his salary from the automaker by approximately 5 billion yen over the course of 5 years, which translates to $44.6 million, and for personal use of the automaker's funds and assets. The months-long investigation also implicated top-ranking executive Greg Kelly, who held the post of Representative Director and who has also been arrested, according to a press conference held by Nissan CEO Hiroto Saikawa.
Ghosn was reportedly taken into custody by prosecutors upon his arrival at an airport in Japan.
"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," the automaker said in a statement.
Ghosn has led Nissan as president from 2000 and as president and CEO since June 2001, and is credited with bringing the automaker back from the brink of bankruptcy. Ghosn has also served as the chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, with Ghosn becoming chairman of Mitsubishi Motors in 2016 after the automaker suffered severe financial problems as a result of the fuel efficiency data scandal. Collectively, the three brands represent the world's third largest automaker after Volkswagen and Toyota.
"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," Nissan added in a statement.
"Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. We will continue to do so."
The automaker said that it plans to formally remove Ghosn and Kelly from their corporate posts.
"It’s very difficult to express this in words," Nissan CEO Saikawa said in a press conference. "Beyond being sorry, I feel big disappointment and frustration and despair and resentment. I feel despair, indignation and resentment. As the details are disclosed I believe people will feel the same way that I feel today."
Neither Ghosn nor his representatives have made a statement in the wake of his arrest addressing the investigation or the allegations.
The arrest of Ghosn sent shockwaves through the Japanese corporate world on Monday, likely bringing to an end a very long corporate tenure that had repeatedly faced criticism of concentrating too much power in the hands of one individual. Ghosn had stepped down as CEO of Nissan in Feb. 2017 and promoted Saikawa to the post, but even that move was not interpreted as significantly diluting his influence within the group of companies.
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