Nissan seen calling meeting to name Ghosn replacement as chairman

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TOKIO – If directors Carlos Ghosn and Greg Kelly do not give up their position at Nissan, the company expects to convene a special shareholders' meeting to remove them.

Nissan does not want to wait until next June, when its statutes stipulate that annual meetings take place, to fully excise both men, an executive member who is familiar with the aforementioned philosophy.

The board of Nissan unanimously agreed with Ghosn on Thursday as chairman and representative after being arrested in Tokyo on Monday for accusations of financial misconduct, including underreporting his compensation and personal use of company assets. During the three-and-a-half-hour meeting, the board also decided to remove the status of representative director of Kelly.

Both men retain their positions as regular directors, at least for the time being, because the shareholders of the company are the last arbitrators as to whether directors can lose that status.

"Unless they voluntarily resign, it is appropriate to hold an extraordinary shareholders' meeting," the management said, refusing to speculate when that might happen.

Nissan aims to appoint a new chairman within a month or two, hopefully before the next board meeting scheduled for December 20, Reuters reported. The Nikkei business center in Japan also reported that the board would meet next time in December to begin with the task of choosing a new seat.

Under Japanese law, listed companies such as Nissan must cancel a two-week notice before convening an extraordinary or regular shareholders' meeting. Nissan usually sends invitations three weeks prior to the annual event in June.

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Nissan's rules stipulate that shareholders' meetings can be chaired by the chairman, the joint chairman or president. So even if Nissan did not appoint a new chairman by that time, Hiroto Saikawa, the current CEO and president, could chair the meeting.

The special meeting is likely to be a meeting, not a mail-in affair. The June meetings are usually held in a large auditorium of the hotel along the waterfront of Yokohama. Hundreds of small investors come together for an opportunity to place managers on the spot with specific questions. Afterwards, Nissan usually treats them for a banquet lunch.

On Thursday, Nissan's executive board charged three external directors with the appointment of a replacement for the board.

The fate of Ghosn and Kelly is uncertain after their arrests. Nissan accuses Ghosn of "significant" financial misconduct and calls Kelly the "mastermind" behind the scheme, which reportedly has diverted Ghosn's pockets at the company's expense.

Both men are allegedly detained in a detention center in Tokyo, where they can be detained and interrogated according to Japanese law up to 20 days before they are formally charged.

Since their arrest neither of them has been seen publicly, nor has a public statement been made. Ghosn retains his position as CEO and Chairman of Nissan's alliance partner Renault, although French car manufacturer appointed chief operating officer Thierry Bollore as deputy CEO to handle Ghosn's duties during his secondment in Japan.

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Replacing Ghosn could cause a new showdown.

The Nikkei reported that Renault, which has a 43.4 percent stake in Nissan, wants to send its members to fill in the two vacancies in an attempt to have more influence on Nissan.

While the company braced itself for the threatening upheaval of leadership, new data on Ghosn's alleged misconduct steadily emerged from the Japanese media.

New attention was given to a subsidiary of Nissan in the Netherlands, which prosecutors say they use corporate funds to buy homes around the world for private use by Ghosn.

National broadcast NHK reported that this company has no office at its registered address in Amsterdam, creating new doubts about its legitimacy.

The company was founded in 2010 and it is believed that Ghosn was the head for the first year and Kelly his representative afterwards, said NHK, referring to unnamed sources.

Naoto Okamura contributed to this report