Ghosn scandal: What we know

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Nissan said it had uncovered "numerous significant acts of misconduct" including a sustained under-reporting of Carlos Ghosn's compensation package
By :

AFP

Carlos Ghosn, one of the world’s most influential executives, is under arrest in Tokyo, in a stunning fall from grace that raises questions about the future of his sprawling Franco-Japanese auto group.

Details are starting to emerge about the allegations of financial misconduct against the 64-year-old executive, who has not yet issued a statement on his fate.

Here is what we know so far about the unfolding scandal:

– What is Ghosn accused of? –

Nissan said it had uncovered “numerous significant acts of misconduct” including a sustained under-reporting of his compensation package.

After a months-long internal probe using information from whistleblowers, Nissan handed over its evidence to authorities.

Prosecutors accused Ghosn and representative director Greg Kelly of conspiring to understate the chairman’s income five times between June 2011 and June 2015.

They said income was reported of 4.987 million yen ($44.5 million) instead of the actual 9.998 million yen in financial statements submitted to authorities.

Nissan also accused him of “personal use of company assets”.

Public broadcaster NHK reported Nissan had paid “huge sums” to provide Ghosn with luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam “without any legitimate business reason”.

– What has the reaction been? –

There has been a brutal reaction on the markets. Nissan shares plunged more than five percent after the news broke while sister company Mitsubishi Motors dropped nearly seven percent.

The news came out while European markets were still open, meaning that Renault was worst affected by the initial sell-off, falling more than 12 percent at one point in Paris.

Paris and Tokyo have scrambled to shore up the Franco-Japanese “alliance” of Nissan, Renault and Mitsubishi Motors, with finance ministers in both countries pledging “strong support”.

President Emmanuel Macron said France would remain “vigilant” over the stability of Renault — in which the French state holds a 15-percent stake — as well as the alliance.

There has been no reaction from Ghosn or his representatives. The tycoon is being held in a detention centre in northern Tokyo.

– Is he still in a job? –

Nissan will hold a board meeting on Thursday to decide its chairman’s fate. However, things are not looking good after the current CEO laid into him and his legacy at a news conference following his arrest.

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