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Nissan Motors' Chairman Carlos Ghosn has been arrested in Japan over misrepresentation in terms of finances. Nissan has also decided to dismiss Carlos Ghosn over the hiatus. Carlos Ghosn is the CEO of Renault and chairman of Nissan and has played a vital role in the growth of both companies over the last two decades.
He has been accused of underreporting his compensation and using assets of the company for personal gain. Carlos Ghosn is one of the most highly-paid personnel in Japan and is one of the most influential people in the global automotive industry.
There had been an internal investigation going on at Nissan for the past several months after a whistleblower alleged misconduct by Carlos Ghosn. The reports from the internal investigation had been shared with public prosecutors which has ended with Ghosn being arrested.
Representative director Greg Kelly too has been arrested as he is also accused of having a role to play in this. It has been revealed by the investigation that both individuals have been underreporting their compensation amounts for many years.
Speaking at a press conference in Yokohama, Japan, Nissan CEO Hiroto Saikawa was quoted as saying, "I am not in a position to talk about the progress of the investigation itself, but as a result of the investigation, we heard that the arrests have been made of the two gentlemen."
At the same press conference, Hiroto Saikawa also said that he would convene a meeting of the board to remove Ghosn and Kelly. The arrests of the top executives have brought Nissan and Renault's values in the stock market down. It has had a cascading effect all over the world, with share prices falling instantly.
Carlos Ghosn has been one of the key people for Renault and Nissan. When he joined Renault in 1996, he turned the company's fortunes around and made it a profit-making business. He did the same with Nissan when Renault bought a controlling stake in the company.
After making turning Nissan too into a profit-making business, Carlos Ghosn stepped down as the CEO of Nissan in 2017 but remained in the post of the chairman. Carlos Ghosn was one of the top-paid personnel in the automotive industry with a compensation of $8.5 million in 2017.
Adding to this was the $10 million compensation he received from Nissan as it's CEO. Nissan sent out a statement, apologising to the shareholders and stakeholders for the inconvenience caused.
Thoughts On Nissan Chairman Carlos Ghosn Being Arrested
Nissan appears to be struggling as this is the second instance that has devalued the company's public image. Earlier this year, Nissan had admitted to falsifying some emissions data from most of the factories in Japan.
Even more damaging is the fact that this could affect the alliance between Renault, Nissan and Mitsubishi. One would have to wait and watch for the implications this could have on the companies and their growth over the next few months.