Nissan’s Ghosn arrest in Japan: France also ousts Renault CEO

Carlos
Ghosn, Chairman and CEO of the Renault-Nissan Alliance, is being
ousted from his roles amid a misconduct
allegations.
Thomson
Reuters

• Nissan and Mitsubishi shares tumbled in Tokyo after
  chairman Carlos Ghosn was arrested and as Tokyo prosecutors
  said he reported only half of his $89 million in
  earnings.
• French President Emmanuel Macron said the state would
  be “vigilant” in encouraging stability at Renault, while French
  ministers said they will push for interim governance. Nissan
  ousted him on Monday.
• Ghosn could face up to 10 years in prison in Japan, a
  fine of up to ¥10 million, or both. 
• Follow the share prices of Renault, Nissan and
  Mitsubishi Motors at Markets
  Insider.

It’s all getting worse for Carlos Ghosn.

Prosecutors in Japan allege the
Renault-Nissan-Mitsubishi Alliance chairman and CEO
earned a salary of about ¥10 billion ($88.7 million) between
2011 and 2015, but reported only half of that. He was arrested
Monday, and could face up to 10 years in prison, a fine of up to
¥10 million, or both. 

Now, the highest members of the French government (France owns a
whopping 15% stake in Renault) have piled on.

“The state as a shareholder will be extremely vigilant to the
stability of the alliance and the group,” French President
Emmanuel Macron
said on Monday. France’s Finance Minister, Bruno Le
Maire,
told France Info that he would push for interim
governance at the carmaker. Renault said executives would meet
imminently to discuss the incident. 

The debacle has
called into question the future of the world’s biggest car
alliance without the veteran executive at the helm. Investors
have showed concern: After Renault shares reached a
four-year low on Monday, Nissan and Mitsubishi Motors followed
suit, tumbling in Tokyo trading. Renault fell for a second day,
and is down 3.1% in Paris trading on Tuesday. 

Renault-Nissan-Mitsubishi have had a strategic partnership since
1999 with Ghosn acting as chairman of all three companies as well
as being CEO at Renault. It was a car-making powerhouse: the
alliance sold more than 10.6 million cars in 2017, the most of
any automaker in the world.

Brazil-born Ghosn, 64, was arrested in Tokyo following
allegations of misconduct with claims that he underreported his
salary with the help of fellow director Greg Kelly. Japanese
broadcaster NHK also said Nissan paid tens of millions of dollars
towards his residences in various global cities, while paying
hundreds of thousands towards his family vacations. 

Ghosn stepped down as CEO of Nissan in 2017. Renault’s shares,
already battered by the US-China trade war, are down about 30%
this year. 

“Nissan deeply apologizes for causing great concern to our
shareholders and stakeholders,” the company Monday. 

Renault declined to comment to Business Insider on Tuesday. 

See Mitsubishi’s intraday performance in the chart below:

Mitsubishi’s
shares crash after Ghosn’s arrest

Markets
Insider