Nissan’s powerful Chairman, Carlos Ghosn, has been arrested on charges of financial misconduct. Several months ago a whistleblower reported that Ghosn and another board member, Greg Kelly, had been underreporting Ghosn’s compensation, Nissan said in a statement. While it’s unclear what Kelly got out of the deal, Ghosn apparently just wanted to make himself richer by not paying taxes on an estimated 5 billion yen ($44 million). In addition to underreporting his income, Ghosn was reportedly also making personal use of company assets and “numerous other significant acts of misconduct.” Kelly’s “deep involvement” was also confirmed.
Nissan’s CEO, Hiroto Saikawa, is asking the board for the prompt removal of Ghosn, and Kelly and has apologized to shareholders for the whole sordid affair.
Ghosn’s arrest will undoubtedly shake up the auto industry, in which he has been a key vocal player for 40 years. It was under Ghosn’s guidance that Nissan recovered from near collapse and formed an alliance with Japan’s Mitsubishi and Renault. Now, as CNN notes, the car-making alliance makes 1 of every 9 cars sold around the world.
After Ghosn’s arrest, the fate of the alliance may be in question, as it had not yet been made permanent.