Nissan board votes to oust Ghosn as chairman

  • Whatsapp

UPDATED: 22-11-2018 9:30 am ET – adds details

TOKYO – The board of Nissan Motor Co. voted unanimously Thursday to remove Carlos Ghosn as chairman and representative, and came a step closer to ejecting the legendary auto executive of the Japanese car manufacturer he had ever rescued from the bankruptcy.

Read More

Under the leadership of CEO Hiroto Saikawa, the board also decided to deprive the status of representative director to Greg Kelly, the American director who was accused of co-conspiring in Ghosn's alleged misdeeds.

Both men retain their seats as regular directors, at least for the time being. That is because the shareholders of the company are the last arbiters on whether Ghosn and Kelly lose that status.

The board is expected to recommend that shareholders vote to dismiss Ghosn and Kelly as directors, but the timing of a shareholders' meeting has not been determined. "That is a natural extension of this whole process," said spokesman Nicholas Maxfield about the scrubbing of the men on the board.

In a statement released after the resolution, Nissan said that the board acted on the basis of an internal investigation showing that Ghosn had committed financial misconduct and had been kept together by Kelly.

Nissan also reaffirmed the support of its alliance with French partner Renault.

"The board recognized the importance of the case and confirmed that the long-term Alliance partnership with Renault remains unchanged and that it is the mission to minimize the potential impact and confusion on day-to-day cooperation," said Nissan.

Nissan is also setting up a committee led by the three independent directors of the board to study how corporate governance can be improved at the Japanese car manufacturer, after the embarrassing allegations that Ghosn has misused millions of dollars over several years.

"The company will further investigate this issue and consider measures to improve the governance of the company," said Nissan in a separate application at the Tokyo Stock Exchange.

Nissan did not name a new chairman after the removal of Ghosn.

The three external directors – Masakazu Toyoda, Keiko Ihara and Jean-Baptiste Duzan – will nominate a new chairman from the existing board, said Nissan.

"It's a coup," said Tatsuo Yoshida, an analyst at Sawakami Asset Management, who worked at Nissan. "The era of Ghosn is over."

The removal of Ghosn displaces the direction of the alliance between Renault and Nissan, which he had personally formed and promised to consolidate with a deeper bond, despite reservations at Nissan.

Ghosn remains Renault's nominee chairman and chief executive, although the company has appointed stand-ins during its detention in Japan. And the management of Renault had urged Nissan to remove Ghosn from his position as chairman, sources that were familiar with the case against Reuters.

& # 39; Most serious crime & # 39;

Ghosn and Kelly were arrested only three days earlier in a fight that stunned the nation. Hours after their arrest Saikawa announced the intention of the board to dismiss both men.

  2021 Jeep Wrangler 4xe gains factory 2-inch lift kit and an at-home charger

Nissan accuses Ghosn of underreporting its income over several years, misuse of business costs and abuse of corporate investment funds. Japanese media say that prosecutors suspect that Ghosn hid 5 billion yen ($ 44 million) in income between 2010 and 2014. The income he disclosed to the authorities was less than half of his actual migration, the reports say .

Even when the board of Nissan met, new details about the alleged crime of Ghosn dripped into the Japanese media.

The national broadcaster NHK reported that prosecutors suspect that Ghosn received about 100 million yen ($ 885,300) in unreported funds from a subsidiary established in the Netherlands.

Ghosn would also have used a subsidiary of Nissan to buy homes around the world – in Paris, Amsterdam, Beirut and Rio de Janeiro – for its personal use. That company is also based in the Netherlands, but it was unclear whether the two Dutch entities were the same.

NHK reported that Ghosn also reportedly had thrown corporate funds to pay for family outings. The Asahi newspaper reported that Ghosn's older sister received about $ 100,000 a year from Nissan for an advisory role that "did nothing for the company."

Deputy Supreme Public Prosecutor Shinji Akimoto of the district prosecutor's office in Tokyo rejected any suggestion that the investigation might be politically motivated.

"Falsification of the financial overview is categorically one of the most serious crimes in the Financial Instruments and Exchange Act," he said at a regular press conference.

"When a crime is suspected and there is evidence, we will carefully assess whether it justifies a complaint, and we do not do so with an agenda in mind. & # 39;

Shareholder vote

Meanwhile, Ghosn has a prominent Japanese defense lawyer who previously led a public prosecutor in Tokyo focused on corporate crime, according to NHK.

The board of Nissan can only deprive the title of Ghosn & # 39; s chairman and the positions of Ghosn and Kelly as representative directors. That is why they still hold their titles as regular directors.

A board member can only be dismissed as a director via a vote of the shareholder.

The next regular shareholders' meeting is not expected until June 2019. Before that time, Nissan would need an extraordinary meeting to remove Ghosn and Kelly at any time earlier.

The difference between the management functions is one of power and responsibility. Before the vote, the nine-man board of Nissan had only three representative directors, Ghosn, Kelly and Saikawa.

The board did not mention any new representative directors at the Thursday meeting.

Representative directors are authorized to act as legal representatives for the company in matters such as entering into business deals. The responsibility also entails special obligations.

Mitsubishi Motors has said that the board intends to vote on the removal of Ghosn as its chairman next week. Nissan holds a controlling interest of 34 percent in the smaller Japanese automaker and Ghosn became chairman after Nissan took control at the end of 2016.

  Goodbye MBUX, hello MB.OS. New Mercedes infotainment coming soon

The Nissan framework offers the potential for the showdown of a shareholder when it is time to completely exclude Ghosn and Kelly from the company. Nissan's French partner Renault – where Ghosn still holds his titles as CEO and chairman – has a controlling stake of 43.4 percent in Nissan.

Stopgap clause

However, Nissan does not have to worry about Renault's voting block, thanks to an emergency solution in its alliance agreement with the French car manufacturer.

That clause was added in 2015, when Renault and Nissan had an earlier impasse about possible interference in the corporate governance of the Japanese company.

The French government, which is Renault's largest shareholder with a 15 percent stake, is looking for more control over Renault at that time. To overcome Japanese concerns about government interference, Renault agreed to limit its formal control over Nissan.

The result of the deal, both parties agreed, is that Renault will exercise its voting rights to support a decision of a Nissan board regarding the removal, appointment or remuneration of a board member. So Nissan could expect Renault to record its 43.4 percent voting power behind any recommendation from Nissan's board on these matters.

Without Ghosn or Kelly – both men would be detained in a detention center in Tokyo after their arrest – Nissan's vote on Thursday continued with the remaining seven members.

In addition to the three external directors, the board includes Nissan-lifer Saikawa, as well as Nissan executive Hideyuki Sakamoto and former Nissan vice president Toshiyuki Shiga.

Bernard Rey, a former chairman of the Renault Formula One team, is also on board.

Here is a look at each of them:


• Carlos Ghosn, 64: arrested and detained in Japan. The legendary turnaround artist who saved Nissan from bankruptcy was a high-flying rock star manager. Until his own company accused him of putting millions in the pocket because of financial crimes.

• Greg Kelly, 62: arrested and detained in Japan. The American lawyer rose through the ranks and concentrated mainly on human resources, first at Nissan North America, then at the head office in Japan and ultimately for the entire alliance. In 2012 he joined the board, but he was tared on his departure as the mastermind & # 39; behind the supposed plans of Ghosn.

Team Nissan

• Hiroto Saikawa, 65: president and CEO. The Nissan lifer joined Japan's # 2 car manufacturer in 1977 and grew to be known as the point man in the Renault-Nissan Purchasing Organization, the innovative team of companies that boosted the car manufacturer's profits while pushing down costs . The old Ghosn protégé soured his boss after he had full control in April 2017 as sole CEO. It was only then that Saikawa began to set his own course for the company and to reverse some of the dubious business strategies that Ghosn aspired to.

• Hideyuki Sakamoto, 62: Executive Vice President Manufacturing and Supply Chain Management. Globetrotting Sakamoto has done almost everything since he joined Nissan in 1980. The fluent English speaker worked at the Nissan Technical Center North America in the United States and for Renault in Brazil. He even worked for the parts supplier Calsonic Co. on an exchange program. Sakamoto began his career as a body test engineer and grew up to lead global product engineering before taking on his new duties in global production in January.

  2024 Nissan Ariya Nismo EV SUV: A First Look at Performance and Innovation

• Toshiyuki Shiga, 65: Warhorse Shiga has seen that the Alliance is unfolding and expanding rapidly, everything up close and personal. Ghosn was so impressed by the business insight of this experienced business planner that he made Shiga into COO in 2005. Shiga joined the board in the same year and was promoted to vice-president under his former mentor in 2013. Shiga dropped that title in 2017, but continues to serve on the board.

Team Renault

• Jean-Baptiste Duzan, 72: The French financial guru began his career with the Citibank group in 1970 and withdrew through Paris and other international assignments. Duzan, an external director who has been on the Nissan board since 2009, ended up in Yokohama through a 23-year career at Renault. During his tenure at the French automaker, he was director of financial operations and senior vice president of procurement. He served on the board of directors for more than ten years before retiring in June 2009, the same month when he joined Nissan.

• Bernard Rey, 72: This former president of the Renault Formula One team has been thrown back and forth between France and Japan since he began his career in 1969 at Renault and worked in procurement. When Renault organized its 1999 rescue of the then-faltering Nissan, Ghosn selected the French executive as one of the 30 Renault leaders he would bring to Japan to lead the Nissan revival. Rey returned to Renault until 2007 and left the car career in 2011. He was named after the Nissan board three years later.


Keiko Ihara, 45: a speedy speed devil, this professional driver has a preference for tearing up the track in a Nissan GT-R or another car with more than 300 hp. She has long been an ambassador for motorsport and was appointed to the board in June as part of a nationwide campaign to inject more external voices into the male dominated hierarchy of Japan. Ihara's interest in racing began during her days as a raster girl for Formula One. But it really started when she realized she could drive the car and not just stand beside them. She quickly became the only female racer from Japan to compete in the grueling World Endurance Championship series.

• Masakazu Toyoda, 69: a new appointment intended to support corporate governance with input from third parties, Toyoda provides insight into the internal functioning of the Japanese government. As a former civil servant at the Ministry of Economic Affairs, Trade and Industry, Toyoda specializes in trade relations, international affairs and energy. He joined the Nissan leadership team in June.

Naoto Okamura contributed to this report

Related posts