Features Japan Auto

Nissan dismiss Carlos Ghosn after 2 years of leadership

09, Apr. 2019

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TOKYO, Kyodo - Nissan Motor Co. shareholders approved Monday removing Carlos Ghosn from its board, putting an end to nearly two decades of his leadership that saved the company from the brink of collapse to create one of the biggest global carmakers.

The decision, made at an extraordinary shareholders' meeting, came after Ghosn was ousted as chairman following his arrest and that of his close aide Greg Kelly last November for alleged financial misconduct.

Nissan's partners Renault SA and Mitsubishi Motors Corp. have said Ghosn will step down as a director in June.

Shareholders, meeting for the first time since Ghosn's arrest, also approved Nissan's proposal to remove Kelly as director and appoint Renault Chairman Jean-Dominique Senard as a board member.

Nissan CEO Hiroto Saikawa, faced with questions from some shareholders about whether he should resign to take responsibility for the turmoil at the automaker, said he will stay in his post to bolster operations and governance as well as the alliance with its two partners.

“I have the responsibility to stabilize the alliance and minimize the effect on our operations and distress among the employees,” Saikawa told the meeting.

“I will think about my future when I reach the point where I can hand over the baton to the next (leader).”

Ghosn's removal will mark a dramatic break for Nissan from the growth strategy pursued under his charismatic leadership and pose a challenge for its future success in an industry that is experiencing a rapidly changing competitive environment.

The new management team will start working on measures to enhance its corporate governance as an urgent task. A third-party committee has made proposals including tapping outside directors as board members and creating committees to oversee executive remuneration and appointments.

The committee said earlier in a report that “the primary root cause” of the alleged misconduct “was the concentration of all authority in Mr. Ghosn, including those regarding human affairs and compensation issues.”

Ghosn lost his chairmanship posts at Nissan, Renault and Mitsubishi Motors after his arrest. He also resigned as CEO of Renault.

The 65-year-old has been charged with violating the financial instruments law by underreporting his remuneration. He also faces a charge of aggravated breach of trust in relation to the alleged transfer of private investment losses to the automaker's books. He has denied all allegations.

Kelly, former Nissan representative director, was indicted for conspiring to understate Ghosn's remuneration in the automaker's securities reports over a number of years.

Ghosn was released on bail on March 6 after 108 days in detention but was rearrested Thursday on a fresh allegation that he misused Nissan funds and caused the automaker a $5 million loss.

Junichiro Hironaka, one of Ghosn's lawyers, will meet the press on Tuesday to release a video of a statement recorded by the former Nissan chairman while out on bail, according to the Foreign Correspondents' Club of Japan. Ghosn is expected to deny the latest allegation against him in the video, which is around nine minutes in length.

Nissan has said an internal investigation, triggered by a whistle-blower's report, found Ghosn used company's assets and funds for private purposes. The report came as Ghosn was apparently seeking a merger of Nissan and Renault, sources close to the matter have said.

Sent to Nissan in 1999 as chief operating officer after the Japanese automaker forged a capital alliance with Renault, Ghosn was credited for saving the Japanese carmaker from near bankruptcy through savage cost-cutting.

He became Nissan president in 2000 and served as chief executive officer from 2001 to 2017, reconfiguring the Japanese-Franco partnership to generate greater synergy effects by sharing procurement costs and technology among other steps.

The group became the second-largest auto group last year after Volkswagen AG. (Kyodo)