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The Journal Gazette

  • Ghosn

Tuesday, November 20, 2018 1:00 am

Nissan official arrested in Japan

Allegedly misused company funds

YURI KAGEYAMA | Associated Press

YOKOHAMA, Japan – Nissan Chairman Carlos Ghosn, who became one of the auto industry's most powerful executives by engineering a turnaround at the Japanese manufacturer, was arrested Monday and will be fired for allegedly underreporting his income and misusing company funds, the automaker said.

The scandal reverberated across the globe and abruptly threw into question Ghosn's future as leader of the Renault-Nissan-Mitsubishi alliance, which sold 10.6 million cars last year, more than any other manufacturer.

Nissan CEO Hiroto Saikawa said Ghosn was taken into custody after being questioned by prosecutors upon arriving in Japan earlier in the day. Ghosn is of French, Brazilian and Lebanese background and lives in France and Japan.

Nissan said Ghosn, 64, and another senior executive, Greg Kelly, were accused of offenses involving millions of dollars that were discovered during a monthslong investigation set off by a whistleblower. Kelly was also arrested.

“Beyond being sorry, I feel great disappointment, frustration, despair, indignation and resentment,” Saikawa said, apologizing for a full seven minutes at the outset of a news conference.

Yokohama-based Nissan Motor said it is cooperating with prosecutors in their investigation.

Saikawa said Nissan's board will vote Thursday on dismissing Ghosn and Kelly, whom he described as the mastermind of the alleged abuses.

“This is an act that cannot be tolerated by the company,” he said. “This is serious misconduct.”

Saikawa said three major types of misconduct were found: underreporting income to financial authorities, using investment funds for personal gain and illicit use of company expenses.

He said that because of the continuing investigation, he could not disclose many details. But he promised to tighten internal controls, saying that the problems may have happened because too much power was concentrated in one person.

“We need to really look back at what happened, take it seriously and take fundamental countermeasures,” he said.