Japanese car giant Nissan has formally sacked its chairman Carlos Ghosn after his arrest for alleged financial misconduct.
- Shareholders are yet to vote on removing Carlos Ghosn from the board
- Mitsubishi has indicated it will sack Mr Ghosn as chairman next week
- But French carmaker Renault says it will keep him on as chairman and CEO
Mr Ghosn was arrested by prosecutors in Tokyo on Monday for allegedly underreporting his income to Japanese regulators by about 5 billion yen ($60.9 million) over several years.
The scandal has rocked the Japanese carmaker — and prompted questions about the fate of the world’s largest auto alliance Renault-Nissan-Mitsubishi, of which Mr Ghosn also leads.
An internal investigation into the allegations by Nissan found Mr Ghosn and board director Greg Kelly were involved in “significant acts of misconduct”.
At an extraordinary board meeting, directors discussed the termination of Mr Kelly and Mr Ghosn for several hours.
Although both men lost their posts, a shareholders’ vote is required to remove them from the board altogether.
The investigation was triggered by a whistleblower report and found that Mr Ghosn had used company assets for personal gain.
Mitsubishi indicated it would sack Mr Ghosn as chairman at a board meeting next week.
France’s Renault has ‘not seen evidence’
But Renault — where Mr Ghosn is also chairman and chief — is sticking by its leader until it sees evidence of the alleged misconduct for itself.
The French Government, which owns 15 per cent of Renault, also backed that assessment.
“Let me say here that we have the rule of law and that we are attached to to presumption of innocence,” Finance Minister Bruno Lemaire said.
“At this stage, we do not have any evidence to support the accusations levelled against Mr Ghosn.”
The French company’s board of directors has appointed chief operating officer Thierry Bollore to fill in while Mr Ghosn is “temporarily incapacitated”.
Mr Ghosn is being held at the Tokyo Detention Centre, where prosecutors were granted a request on Wednesday to extend his incarceration for another 10 days.
Deputy public prosecutor Shin Kukimoto said he would not comment on whether Mr Ghosn had admitted to allegations of financial misconduct.
He said the allegations of falsification of financial reporting carry heavy penalties because they distort markets and violate transparency requirements for listed companies.
He confirmed that Mr Ghosn had been allowed to meet officials from the French embassy and also his lawyer, who was not allowed to be present during questioning.
Prosecutors in Japan have significant powers to detain suspects and have the ability to interrogate them daily without a lawyer present.
Dispute was brewing over foreign control
The arrest of Mr Ghosn has thrown a spotlight on a dispute between him and Nissan’s chief Hiroto Saikawa.
This year Mr Ghosn said he was open to a merger between Nissan and Renault, but Mr Saikawa has opposed the move, which would result in the Japanese corporate icon coming under foreign control.
Nissan, while almost 60 per cent bigger than Renault by sales, remains junior in their shareholding structure.
Renault owns 43 per cent of Nissan after it helped save the company two decades ago and turned it around under Mr Ghosn’s leadership.
Nissan owns 15 per cent of Renault — a non-voting stake.
This week, the Financial Times reported that Mr Ghosn was planning a Nissan-Renault merger, a deal that Nissan’s board opposed and was looking for ways to block.
But while Nissan is agitating for change, the French and Japanese Governments talked up the need for stability in the alliance.
“We need to return to the original idea of a win-win relationship,” a long-time Nissan executive told reporters at a briefing in Tokyo, speaking on condition of anonymity.
He said it should be “a more equal relationship than before”.
The Nissan executive said a reduction of Renault’s stake in Nissan should be one option under consideration.