Carlos Ghosn, chairman of Nissan Motor Co for nearly two decades and Japan’s most celebrated foreign executive, has been arrested.

Mr Ghosn (64) is suspected of under-reporting his income by millions of dollars, breaching Japan’s financial trading law, according to the Asahi newspaper.

Broadcaster NHK said the Brazilian-born executive was formally arrested on Monday after voluntarily presenting himself to Tokyo prosecutors. It is understood he met the prosecutors by arrangement at Haneda Airport, while entering the country.

Nissan is already preparing to sack Mr Ghosn following an internal probe that revealed serious financial misconduct “over many years”, the company said in a statement. An extraordinary board meeting will be held on Thursday.

The carmaker’s chief executive, Hiroto Saikawa, told a packed press conference on Monday that he felt “despair and indignation” at the discovery, which he blamed on Mr Ghosn’s “long regime”.

Nissan’s recovery, said Mr Saikawa, was thanks to the “hard work of many, many people and not just one individual”. He added that the company would now work to eliminate “overconcentration” in the hands of one man.

Renault share price

Mr Ghosn is also chief executive of Renault, Nissan’s French partner, and chairman of Japanese carmaker Mitsubishi Motors. News of his stunning fall from grace sent the share price of Renault down 15 per cent in France. Japanese stock markets had closed by the time the story broke.

The Nissan statement said Mr Ghosn and Greg Kelly, a director of the group, have been under-reporting compensation amounts in securities reports to the Tokyo Stock Exchange “in order to reduce the disclosed amount of Carlos Ghosn’s compensation”.

“Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets,” the statement added.

Mr Ghosn became president of Nissan in 2000 after being assigned to turn it around by Renault, which owns 42 per cent of the Japanese firm. He quickly slashed excess capacity, shut five factories and eliminated 21,000 jobs, earning him the moniker “Le Cost Cutter”, a nickname he reportedly dislikes.

His strategy of using savings from these measures to invest back into a slimmed-down line-up of car and truck models is widely credited with pulling the company out of the fire and made him one of the most popular executives in Japan.

His superstar status was confirmed in 2001 when he was featured in a superhero comic book.

Mr Ghosn’s decision to add scandal-tainted Mitsubishi Motors to his portfolio in 2016 (when Nissan took a 34 per cent stake) triggered concerns that he was overstretching. As chief executive and chairman of the three-way alliance, he effectively controlled one of the world’s biggest carmakers.

He recently married for a second time and hinted at his gradual retreat from the industry.

Nissan said it had been alerted to the misconduct by a whistleblower and had referred the case to the Tokyo public prosecutor’s office after its own investigation. Mr Ghosn was under investigation for breaching the financial instruments and exchange law, possibly by making false entries on corporate statements.

The case will be closely followed in Japan. One of the mysteries to be cleared up is why one of the nation’s most extravagantly paid bosses felt the need to further pad his bank account – at great personal risk.

Public accounts show Mr Ghosn had a multimillion-euro pay package for his combined roles in Nissan, Renault and Mitsubishi – in a country where executive pay is traditionally modest.</s>Nissan Chairman Carlos Ghosn, one of the auto industry's most high-profile executives, has been arrested by prosecutors in Japan after an internal investigation revealed "significant acts of misconduct" over many years by him and another top executive.

The stunning announcement ripped through a powerful global alliance of automakers, slamming the stocks of Nissan (NSANY) and Renault (RNSDF), where Ghosn also serves as chairman.

Together with Japan's Mitsubishi Motors (MMTOF), Nissan and Renault make up the biggest global carmaking alliance, which manufactures one of every nine cars sold around the world.

Nissan said in a statement that it had been investigating Ghosn, a 40-year veteran of the auto industry, and another board member for months following a whistleblower report.

"These two gentlemen were arrested this evening, that is what I understand," Nissan CEO Hiroto Saikawa said at a press conference in Tokyo late on Monday.

The company said its investigation found that Ghosn, 64, and the other board member, Greg Kelly, had been under-reporting Ghosn's compensation. "Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets," it added.

As a result, CEO Saikawa will propose to Nissan's board of directors to "promptly remove Ghosn from his positions as chairman and representative director," at a meeting on Thursday, the company said. He will also try to have Kelly removed from the board.

Shares in Renault, where Ghosn is chairman and CEO, plunged as much as 13% in Paris. Renault didn't immediately respond to a request for comment.

French President Emmanuel Macron said the government was watching closely.

"The state, as a [Renault] shareholder, will be extremely vigilant regarding the stability of the alliance and the group," Macron said during a visit to Belgium.

Nissan's announcement came after the close of trading in its stock in Tokyo. But its shares plummeted 10% on the Frankfurt stock exchange.

"Nissan deeply apologizes for causing great concern to our shareholders and stakeholders," the company's statement said. "We will continue our work to identify our governance and compliance issues, and to take appropriate measures."

Ghosn is also chairman of Mitsubishi Motors. CNN wasn't immediately able to reach Mitsubishi for comment outside of regular business hours.

Under Ghosn, the three carmakers formed an alliance that rivals Volkswagen (VKLAF) and Toyota (TM) in terms of vehicle sales. The alliance sold 10.6 million vehicles last year.

Together, Renault, Nissan and Mitsubishi employ more than 470,000 people in nearly 200 countries, according to the alliance's website.

Nissan's revelations came after Japan's Asahi Shimbun newspaper and broadcaster NHK reported that prosecutors were questioning Ghosn on suspicion of under-reporting his salary and may arrest him.

The prosecutors' office didn't respond to a request for comment outside regular office hours. CNN wasn't immediately able to reach Ghosn, Kelly or their representatives for comment.

Nissan said it paid Ghosn a salary of 1.1 billion yen ($9.7 million) in the year ended March 2017, his last as CEO. Nissan doesn't break out individual board members' compensation in its annual report.

A company spokesman didn't immediately respond to a request for more information about Ghosn's compensation.

Born in Brazil, Ghosn started his career at French tire maker Michelin in 1978, working his way up to running the company's North American operations.

He moved to Renault in 1996. After the French carmaker established its alliance with Nissan in 1999, he became the Japanese firm's chief operating officer, helping steer it out of financial crisis.

The turnaround earned him the nickname "Le cost killer."

Ghosn was promoted to CEO of Nissan in 2001, and then made the unusual move of taking on the role of Renault CEO in 2005. That made him the first executive to run two Fortune Global 500 companies at the same time.

After Nissan took a 34% stake in Mitsubishi Motors in 2016, Ghosn handed off the Nissan CEO role to Saikawa.</s>Nissan Motors said Monday it was moving to dismiss chairman Carlos Ghosn after uncovering "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.

Broadcaster NHK and the Yomiuri newspaper reported that Ghosn was arrested by Tokyo prosecutors, while the Asahi newspaper reported that prosecutors began searching offices at Nissan's headquarters and other locations on Monday evening.

Nissan said it had been conducting an internal investigation over the past several months based on a report from a whistleblower regarding misconduct involving Ghosn and Representative Director Greg Kelly.

"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," it said in a 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."

Nissan said CEO Hiroto Saikawa would propose to the board to remove Ghosn and Kelly.

Renault shares tumbled more than 10 percent in Paris, while Nissan's German-listed securities fell almost 10 percent.

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 nickname "Le Cost Killer."

He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO from 2001 until 2017. Ghosn then stepped down as Nissan CEO but remained chairman of the company. He became a star in the business world in Japan, even spawning a manga comic book on his life, although he also attracted criticism 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 7.4 million euro ($8.5 million) compensation for 2017. He also received the equivalent of more than $10 million in his final year as Nissan chief executive.

"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," the company said.

The news is the latest scandal to sully Nissan's brand. In July, it admitted it had uncovered falsified emissions data from most of its factories in Japan, while in 2017 it admitted it had allow 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."

The Washington Post's Akiko Kashiwagi contributed to this report.</s>TOKYO (Reuters) - Nissan Motor Co Ltd said on Monday it was moving to terminate Carlos Ghosn from his chairman’s post after finding that he had used company money for personal use and committed several other serious acts of misconduct.

The Japanese automaker said that based on a whistleblower report, it had been investigating possible improper practices of Ghosn and Representative Director Greg Kelly for several months, and that it was fully cooperating with investigators.

“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 a statement.

It said CEO Hiroto Saikawa would propose to the Nissan board to remove Ghosn and Kelly.

The Yomiuri newspaper reported that Ghosn had been arrested by Tokyo prosecutors on suspicion of under-reporting his salary. Earlier, several outlets had reported he was being questioned.

The news comes as a shock in Japan where Ghosn, a rare foreign top executive, is well regarded for having turned Nissan around from near bankruptcy. Ghosn is also chairman and chief executive of France’s Renault.

The Asahi newspaper reported on its website that prosecutors had begun searching the offices of Nissan’s headquarters and other locations on Monday evening.

Nissan said it would brief reporters on Monday evening. Spokesmen for Renault and the Renault-Nissan-Mitsubishi Motors alliance did not immediately return calls and messages seeking comment on the arrest reports.

An ouster of Ghosn, 64, is bound to raise questions about the future of the alliance that he personally shaped and had pledged to consolidate with a deeper tie-up, before eventually stepping back from its operational leadership.

Renault shares tumbled 13 percent in Paris to be among the worst performing stocks in Europe.

Brazilian-born, of Lebanese descent and a French citizen, he began his career at Michelin in France, moving on to Renault. He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO in 2001. Ghosn remained in that post till last year.

In June, Renault shareholders approved Ghosn’s 7.4 million euro ($8.45 million) compensation for 2017. In addition to this, he received 9.2 million euros in his final year as Nissan chief executive.</s>Nissan Chairman Carlos Ghosn, one of the auto industry’s most high-profile executives, has been arrested in Japan after an internal investigation revealed “significant acts of misconduct” over many years by him and another top executive.

The stunning announcement ripped through a powerful global alliance, slamming the stocks of Nissan (NSANY) and Renault (RNSDF), where Ghosn also serves as chairman.

Together with Japan’s Mitsubishi Motors (MMTOF), Nissan and Renault make up the biggest global carmaking alliance, which makes one of every nine cars sold around the world. The three companies employ more than 470,000 people in nearly 200 countries.

Nissan said in a statement that it had been investigating Ghosn, a 40-year veteran of the auto industry, and another board member for months following a whistleblower report.

“These two gentlemen were arrested this evening, that is what I understand,” Nissan CEO Hiroto Saikawa said at a press conference in Tokyo late on Monday.

Japanese prosecutors confirmed the arrests of Ghosn, 64 and the other board member, Greg Kelly, on suspicion of violating financial laws by filing false statements. According to the prosecutors’ statement, the two men allegedly collaborated to under-report Ghosn’s income by about 5 billion yen ($44 million) over a five-year period ending in March 2015.

CNN wasn’t immediately able to reach Ghosn, Kelly or their representatives for comment.

The maximum punishment in Japan for filing a false financial statement is up to 10 years in prison and a fine of up to 10 million yen ($89,000).

Nissan said its internal investigation also found “numerous other significant acts of misconduct … such as personal use of company assets.”

As a result, CEO Saikawa will propose to Nissan’s board of directors to “promptly remove Ghosn from his positions as chairman and representative director,” at a meeting on Thursday, the company said. He will also try to have Kelly removed from the board.

Shares in Renault, where Ghosn is chairman and CEO, closed down more than 8% in Paris. Renault said its board would convene “very shortly” to discuss Nissan’s revelations.

French President Emmanuel Macron said the government, which owns 15% of Renault, was watching closely.

“The state, as a [Renault] shareholder, will be extremely vigilant regarding the stability of the alliance and the group,” Macron said during a visit to Belgium.

Nissan’s announcement came after the close of trading in its stock in Tokyo on Monday. Its shares were down around 5% on Tuesday morning.

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

Ghosn is also chairman of Mitsubishi Motors. The Japanese company said it was proposing that its board “promptly” remove Ghosn from that position. Its shares fell about 7% in Tokyo on Tuesday morning.

Under Ghosn, the three carmakers formed an alliance that rivals Volkswagen (VKLAF) and Toyota (TM) in terms of vehicle sales. The alliance sold 10.6 million vehicles last year.

Nissan said last year that it paid Ghosn a salary of 1.1 billion yen ($9.7 million) in the year ended March 2017, his last as CEO. Nissan doesn’t break out individual board members’ compensation in its annual report.

Born in Brazil, Ghosn started his career at French tire maker Michelin in 1978, working his way up to running the company’s North American operations.

He moved to Renault in 1996. After the French carmaker established its alliance with Nissan in 1999, he became the Japanese firm’s chief operating officer, helping steer it out of financial crisis.

The turnaround earned him the nickname “Le cost killer.”

Ghosn was promoted to CEO of Nissan in 2001, and then made the unusual move of taking on the role of Renault CEO in 2005. That made him the first executive to run two Fortune Global 500 companies at the same time.

After Nissan took a 34% stake in Mitsubishi Motors in 2016, Ghosn handed off the Nissan CEO role to Saikawa.</s>Renault says Carlos Ghosn will remain as automaker's CEO while detained in Japan on claims he misused Nissan assets

PARIS (AP) — Renault says Carlos Ghosn will remain as automaker's CEO while detained in Japan on claims he misused Nissan assets.</s>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>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>Arrest Of Nissan Chairman Threatens Future Of Alliance With Mitsubishi And Renault

Nissan Chairman Carlos Ghosn was arrested in Japan on Monday, reportedly on charges he misreported his own income.</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."
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.