Nissan chairman Carlos Ghosn was arrested for alleged financial misconduct extinguishing key shareholder Renault's hope for a merger. Nissan Ceo Hiroto Saikawa vocally opposed Ghosn's statement that he was open to Renault's proposal of a merger.
Ghosn is the Chairman of Nissan, Renault, and Mitsubishi Motors. He was detained on Monday by Japanese authorities after an investigation revealed that the chairman made "significant acts of misconduct" by misreporting his earnings in filings to the Tokyo stock exchange.
According to the prosecutors, Ghosn and board member Greg Kelly collaborated to falsely report the chairman's income by decreasing it by about 5billion yen in a five-year period until March 2015. He is expected to serve the maximum punishment of 10 years in prison and fined up to 10 million yen for filing a false financial statement.
According to Nissan, they also found pieces of evidence of "numerous other significant acts of Misconduct" including personal use of company assets and the chairman's misuse of the company's funds.
Ghosn's threats his leadership roles at Nissan, Mitsubishi, and Renault. CEO Hiroto said that the company will meet on Thursday to take the accused out of the board.
Earlier this year, Ghosn announced that he is open to the idea of merging Nissan and Renault which was vocally disputed by CEO Hiroto. According to Max Warburton, it has been interesting to see Nissan's CEO Saikawa vocally oppose the idea of a merger and, now that they have Ghosn being defenestrated, it is hard not to conclude that there may be a gulf opening up between Renault and Nissan.
Currently, Renault owns 43 percent of the shares in Nissan after the company helped the latter to its success under Ghosn's leadership. Nissan's share in Renault is 15 percent. According to experts, the scandal faced by the chairman will end all speculations of a possible merger.
According to the prosecutors, the accused are generally detained in a center that is separate from the prison for 10 days as the interrogation continues. Under Japan's law, officials can detain suspects for 20 days per possible charge without an official indictment. According to reports, none of the accused has been charged so far.
At the moment, Ghosn is still the CEO of Renault and the company's chief operating officer, Thierry Bollore, will act as the acting-chief in his behalf. The company is requesting Nissan to share vital information about their internal investigation into Ghosn.
