November 19, 2018 12:36 CET
Nissan Chairman Carlos Ghosn has been arrested over suspected financial violations, Japan’s NHK national public broadcaster said, as the automaker said it will seek Ghosn’s removal over allegations that he used company money for personal use and committed other serious acts of misconduct.
Ghosn under-reported nearly 10 billion yen ($88.70 million) in compensation as nearly 5 billion yen, Jiji news agency reported on Monday. Kyodo news agency said the under-reporting took place over five years, from 2011 to the present.
NHK said Ghosn was detained on Monday over a suspected breach of Japanese financial law. Ghosn voluntarily went with Tokyo prosecutors, Asahi newspaper reported. Prosecutors had begun searching the offices of Nissan’s headquarters and other locations on Monday evening local time, the paper said.
Based on a whistleblower tip, Nissan has been doing an internal investigation over the past several months into suspected financial misconduct involving Ghosn and director Greg Kelly, the company said Monday. Nissan seeks to remove both Ghosn and Kelly.
“The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,” Nissan said.
“Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed,” the company said.
Nissan said it has been providing information to the Japanese prosecutors and is cooperating fully with their investigation.
Ghosn, 64, built the three-way union of Renault, Nissan and Mitsubishi Motors. He said in September that he will continue to pare back his roles at the three individual companies, while continuing to head their alliance.
A spokesman for Renault declined to comment. Shares of the French automaker fell as much as 15 percent in Paris, while Nissan global depository receipts sank more than 11 percent.
Among the best paid executives in both Japan and France for several years, Ghosn’s compensation has regularly drawn criticism. Ghosn receives numerous paychecks in his multiple roles as chairman of the Renault-Nissan-Mitsubishi alliance, CEO of Renault, and chairman of both Nissan and Mitsubishi.
At Nissan, he was paid about 1.1 billion yen ($10 million) for 2016 and about $6.5 million in the most recent fiscal year. He took home about $8.5 million at Renault and about $2 million from Mitsubishi in the latest period. At Renault, his package for 2017 was narrowly passed by Renault shareholders, but only after he agreed a 20 percent reduction.
Bloomberg and Reuters contributed to this report
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