Friday , January 15 2021

Nissan chair Carlos Ghosn was arrested for improper economic investigation and conduct

Armchair Gusen, chairman of Nissan Motor, was arrested and disqualified due to an unprecedented report on his income and misuse of the company's funds.

Japanese CEO Hiroto Sayakawa confirmed that Gusen was arrested after being questioned by prosecutors following his arrival in Japan earlier that day.

It was an amazing development that would constitute a daunting test for the Nissan-Renault-Mitsubishi Alliance, one of the world's largest vehicle manufacturers.

Yokohama, based in Yokohama, said the alleged violations of millions of dollars by Gusen, 64, and another manager were discovered during a long-term investigation led by Sorek.

"Beyond regret, I feel great disappointment, frustration, despair, anger and anger," said Saikawa, apologizing for seven full minutes at the start of the conference. "I want to minimize the astonishment and impact on our business partners."

Panel vote Thursday

Nissan said that it provides information to prosecutors and cooperates with the investigation. The charges also concern Nissan CEO Greg Kelly, who was also arrested.

Renault and Nissan Motor Chairman Chairman Carlos Ghosn listens during a media conference outside of Paris in 2017 Photo. He will lose his post as chairman after being arrested. (AP)

Saikawa said Nissan's board would vote on Thursday for the dismissal of Gusen and Kelly, whom he described as the "brain" of alleged abuses.

"It's an act that can not be tolerated by society," he said. "It's serious behavior."

Saikawa said three main types of misconduct were found, including income under reporting, through investment funds for personal profit and illegal use of company expenses.

When asked why the company could not locate the prohibited activity for so long, Sai-Kawah said that the reason was that "system in society" allowed for a lack of transparency that made the injustice possible.

Questions about corporate governance

During the press conference he repeated that he had to continue the investigation by exposing many details about the case. But he promised to strengthen corporate governance, adding that the problems may have happened because too much power was concentrated in one person.

"We should really look back on what happened, take it seriously and take fundamental countermeasures," he said.

In 19 years, in Nissan, he signed a contract that was supposed to last until 2022. His compensation, high by Japan's prudent standards for executive pay, has been a topic over the years.

According to the NHK and the Kyodo News Service, Nissan paid Ghosn nearly 10 billion yen ($ 89 million) over five years to March 2015, including other payroll income from the company but reported as if it had only made 5 billion yen ($ 44 million), or Half of what he got.

Nissan's annual report shows that Gusen received an annual salary of over 1 billion yen ($ 1.2 billion) by fiscal year 2016, when shareholders voted against his wage package and his annual salary fell to 735 million yen ($ 8.6 million) 2017, a decline of more than 30 cents.

Shares of France's Renault SA plummeted 14 percent at the beginning of Monday. The news of Gossen's troubles broke out after the Japanese markets closed during the day.

The charges are a hard hit while Nissan and Nissan Motor Co. still overcome scandals on their reporting and quality checks.

Ghosn is credited with helping an exceptional turnaround engineer at Nissan during the past two decades, reviving the Japanese automaker from near bankruptcy after being sent by Renault.

For the past two decades, it has kept an especially high profile in a country where foreign foreign managers of large Japanese companies are still relatively rare.

It resembles a large size in France, where the business world saw it as a sting outside the traditional French mold that made Renault a global player, especially in electric vehicles. He also led the French car maker through big cuts in labor and expensive bailout, controversial between the global financial crisis about a decade ago and what he called a "crisis of massive proportions" for the automotive industry.

Nemesis to the unions

Gusen was also the revenge of French unions and left-wing politicians, who saw him as a symbol of US-led global capitalism and his deviations – especially his wage packages.

Renault shareholders voted in 2016 against Gusen's wage package, and saw it as too generous – but the council ignored the vote. This angered French President Francois Hollande. Holanda's socialist government imposed restrictions on executives' salaries in state-owned companies and tried to do so in the private sector, but recoiled for fear it would scare foreign investment.

For the title of "Le Cost Cutter," Gossen's appointment has raised fears of social and economic upheavals in the closure of factories, mass layoffs and the potential damage that his reforms may cause to Nissan's ties with its suppliers. But his victory in making society around and displaying greater efficiency made him something a national hero.

Gossen served as CEO of Nissan from 2001 to April 2017, when he was CEO of Renault in 2005, and led the two major automakers at the same time. In 2016, Ghosn became a chair of Mitsubishi Motors.

Asked whether Gusen was a charismatic leader or a tyrant, Sayachawa said that as an outsider, "he achieved a lot that many others could not reform, especially in the beginning."

"This is the negative result of Mr. Ghosn's long regime, but over the past 19 years we have been developing many things," Sai-kawa said. "He was part of it, but it was the result of the hard work of many people."

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