TOKYO, Nov 20, 2018 (BSS/AFP) – Nissan and Mitsubishi shares plunged
Tuesday, as the automakers prepared to oust chairman Carlos Ghosn a day after
he was arrested for alleged financial misconduct.
Ghosn’s arrest sent shockwaves through the auto industry, where he was a
towering figure, as well as Tokyo markets.
And his legacy appeared in danger of total collapse, with his own
handpicked successor as Nissan CEO accusing Ghosn of accruing too much power,
in what he called the “dark side” of his leadership.
The spectacular fall of the Brazil-born executive also raised questions
about the future of the sometimes fractious alliance he led of Nissan,
Mitsubishi and Renault.
Nissan and Mitsubishi have said they will propose his removal as chairman,
with Renault’s board also meeting to discuss his fate.
By the break in Tokyo Nissan was down more than four percent while
Mitsubishi was more than seven percent lower. Renault lost eight percent in
Paris.
On Tuesday there were still many unanswered questions about the allegations
against a man long credited with an almost magical ability to turn around
ailing auto companies.
Nissan CEO Hiroto Saikawa said a months-long investigation prompted by a
whistleblower had uncovered years of financial wrongdoing, including under-
reporting of Ghosn’s salary and misuse of company assets.
Prosecutors said they were holding him as they probed allegations he had
under-reported his income by around five billion yen ($44.5 million) over
five years.
– ‘It’s all about money’ –
The shock of his arrest was compounded by the harsh language levelled
against him by Saikawa, who in a news conference accused Ghosn of accruing
too much power.
“Too much authority was given to one person in terms of governance,” he
told reporters at Nissan’s headquarters in Yokohama on Monday. “I have to say
that this is a dark side of the Ghosn era which lasted for a long time.”
Saikawa said he was still thinking through whether Ghosn was “a charismatic
figure or a tyrant”.
It was an almost unthinkable turn of events for Ghosn, 64, who had earned a
virtually unparallelled reputation, particularly in Japan, for his role in
resurrecting Nissan.
Ghosn has dominated the country’s corporate landscape, and is a well-known
figure among the general public, who know him as “Mr Fix It”, partly through
a popular manga comic of his life story.
But the tables had turned Tuesday, with the Yomiuri Shimbun describing
executives at Nissan slamming Ghosn as “greedy”.
“He says the right things, but in the end it’s all about money,” the daily
quoted employees as saying.
It was unclear how long Ghosn could be held, or even when prosecutors would
officially announce the charges against him.
Nissan said it had uncovered years of financial misconduct by Ghosn and
Representative Director Greg Kelly.
– ‘Masterminds’ –
Kyodo news agency reported Tuesday one of the allegations against Ghosn
involved his use of residences purchased by Nissan in four countries.
It also said prosecutors had negotiated a plea bargain for only the second
time since Japanese law changed this year that would allow Nissan officials
who are cooperating to receive lesser charges or lighter penalties.
Saikawa said the ongoing investigation limited what details could be
shared, and refused to be drawn on whether other people were involved, saying
only: “These two gentlemen are the masterminds, that is definite.”
He insisted the partnership among Nissan, Renault and Mitsubishi “will not
be affected by this event,” but had no details on how the other firms would
respond, or who might succeed Ghosn.
The news sparked concern in France, where the state owns a 15 percent stake
in Renault. President Emmanuel Macron said Paris would be “extremely
vigilant” about the stability of the firm and its three-way tie-up.
And French Finance Minister Bruno Le Maire said the government would “do
everything as a shareholder represented on Renault’s board to ensure
operational continuity and stable governance at Renault”.
Despite his international renown and rock-star status, particularly in
Japan, where he was a rare foreign-born executive, Ghosn was not without
detractors.
He earned admiration but also anger for his ruthless restructuring at firms
like Nissan, and was nicknamed “Le Cost Cutter” in France.
And his pay packet was regularly the subject of criticism, including at
Renault, where it sparked a spat with shareholders.