Nissan seen calling meeting to name Ghosn replacement as chairman

November 23, 2018 09:23 CET

TOKYO — If directors Carlos Ghosn and Greg Kelly do not resign their posts at Nissan, the company expects to convene a special shareholders’ meeting to remove them.

Nissan does not want to wait until next June, when its articles of incorporation dictate annual meetings take place, to fully excise both men, an executive familiar with the thinking said.

Nissan’s board voted unanimously Thursday to remove Ghosn as chairman and representative director after he was arrested in Tokyo on Monday over allegations of financial misconduct including under-reporting of his remuneration and personal use of company assets. At the three-and-a-half-hour meeting, the board also decided to strip representative director status from Kelly.

Both men keep their positions as regular directors, at least for now, because the company’s shareholders are the final arbiters on whether directors can lose that status.

“Unless they resign voluntarily, it is appropriate for us to call an extraordinary shareholder’s meeting,” the executive said, declining to speculate when that might take place.

Nissan aims to nominate a new chairman within a month or two, hopefully before its next board meeting slated for around December 20, Reuters reported. Japan’s Nikkei business daily also reported that the board was next scheduled to meet in December to begin tackling the job of choosing a new chair.

Under Japanese law, publicly listed companies such as Nissan must give two-weeks’ notice before convening a shareholders’ meeting, extraordinary or regular. Nissan usually sends invitations three weeks prior to its annual event in June.

Nissan’s governing rules stipulate that shareholders’ meetings may be presided over by the chairman, joint chairman or president. So even if Nissan has not appointed a new chairman by then, Hiroto Saikawa, the current CEO and president, could chair the gathering.

The special meeting will likely be an assembly, not a mail-in affair. The June meetings are typically held in a large hotel auditorium along the Yokohama waterfront. Hundreds of small investors flock for a chance to put executives on the spot with pointed questions. Afterward, Nissan usually treats them to a banquet lunch.

Nissan board on Thursday tasked three outside directors with nominating a replacement from the board.

The fates of Ghosn and Kelly are uncertain following their arrests. Nissan accuses Ghosn of “significant” financial misconduct and calls Kelly the “mastermind” behind the scheme, which allegedly lined Ghosn’s pockets at the company’s expense.

Both men are reportedly being held in a Tokyo detention center where, under Japanese law, they can be held and questioned for up to 20 days before being formally charged.

Neither has been seen in public since their arrest nor made a public statement. Ghosn retains his position as CEO and chairman of Nissan’s alliance partner Renault, although the French automaker has appointed chief operating officer Thierry Bollore as deputy CEO to handle Ghosn’s duties during his detainment in Japan.

Replacing Ghosn could trigger another showdown.

The Nikkei reported that Renault, which has a 43.4 percent stake in Nissan, wants to send in its members to fill in the two vacated posts in a bid for more influence over Nissan.

As the company braced for the looming leadership shakeup, new details about Ghosn’s alleged misconduct steadily streamed from Japanese media.

Fresh attention turned to a Nissan subsidiary in the Netherlands that prosecutors say used corporate funds to buy homes around the world for Ghosn’s private use.

National broadcast NHK reported that this company has no office at its registered address in Amsterdam, raising new doubts about its legitimacy.

The company was established in 2010 and it is thought that Ghosn was its head for the first year and Kelly its representative afterward, NHK said, citing unnamed sources

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