Nissan's president expected him to lose his post after being imprisoned in Japan – 20/11/2018 – The market


Nissan president Carlos Ghosn has been arrested on Monday for alleged financial violations in Japan and suspects that he has avoided the allegation that he is lower than the real one.

Nissan's chief executive, Hiroto, will propose the company management to Ghosn on Thursday (22).

Admired for saving a Japanese car maker from bankruptcy, Ghosn is also the head of the Renault-Nissan-Mitsubishi alliance. The company claimed that Ghosn had been hiding his tax revenue for years and that "several other illegal practices have been discovered, such as the use of company assets for personal purposes".

He and the other director of the automaker, Greg Kelly, have been subject to internal investigation for months, according to a statement issued by Nissan, who said he worked with prosecutors.

Ghosn representatives were not located to comment on the matter.

French President Emmanuel Macron said he would work on maintaining the stability of the Renault-Nissan alliance and that it is too early to comment on the allegations. "As a shareholder, the French government will continue to be vigilant when it comes to stability of the alliance," he said.

The government has 15% of Renault's capital. According to Japanese local media, Ghosn would have reported a revenue of 38 million euros ($ 163 million) lower than the real one.

This practice would start in 2011 and last for over five years. The executive salary has been controversial for years. He earned more than 15 million euros (64.4 million dollars) from Nissan and Renault, but fell in 2017, when he ceased to be the head of the Japanese car maker.

In June, when he became the leader of a French company, he accepted a 30 percent reduction in salary – demand from shareholders – and the nomination of the other, Thierry Bolloré.

Renault and Nissan shares fell on European stock exchanges on Monday after news of arrest. The Japanese stock market was already closed when this fact was revealed.

Born in Brazil, descendant of Lebanese and French citizen, 64-year-old Ghosn, he started his career at Michelin in France, where he worked for 16 years and went to Renault. He came to Tokyo in 1999 to get Nissan back on track, just as the company joined Renault.

He was appointed CEO two years later, with a debt of about $ 20 billion, Nissan suffered shock treatment at the time. There were redundancies, closing companies and shutting down production lines.

Called the "publisher", he transformed the bankruptcy group into a profitable company with an annual turnover of almost EUR 100 billion (429 billion rupees), which brought him great admiration in Japan – he became a manga.

After the repair plan, the company achieved record profits. In 2005, the Executive Director also became the President of Renault, being the first person to drive two cars at the same time. In 2008, Ghosn gathered the management of Nissan.

In April 2017, he handed the baton to Hiroto Saikawa, remaining at the head of the board. He began focusing on the Renault alliance with Mitsubishi Motors, which he took to the top of the global car industry.

In the same year, the company invested in Mitsubishi after the company was affected by the scandal related to the falsification of emissions data.

The Renault-Nissan-Mitsubishi partnership is today an alliance of various companies linked by shares without a majority.

Accusations against Carlos Ghosn, who himself built this alliance, gathering his current roles, like no other performer of this level, is a blow to the Franco-Japanese trio, which aspires to be the world's first car conglomerate.

Last year, 10.6 million delivery vehicles were sold, defeating Toyota and Volkswagen rivals.

During an overcrowded press conference on Monday at Nissan's headquarters, Saikawa described Ghosna and Kelly as "voters" of irregularities and said he felt "strong indignation."

In the interview there were situations in which Saikawa seemed determined to overthrow the image of his predecessor as a company's savior, referring to the changes that Ghosn "set off", but attributing a real loan of value "provided by a large number of employees."

Translation Paulo Migliacci

With Reuters, AFP and Financial Times


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