Monday’s arrest of Carlos Ghosn, who serves as Chairman and CEO of Renault and the Renault–Nissan–Mitsubishi Alliance, as well as chairman of Nissan Motors and Mitsubishi Motors, has sent shockwaves through the industry. Ghosn, along with Nissan’s director Greg Kelly, is being held by Tokyo police for false accounting charges.
The arrests could prove devastating for the Alliance, one of the top car sellers globally. Currently, the market is facing uncertainty due to economic changes and possible shifts in trade policies. The information provided by a whistleblower within the company alleges that Ghosn had the company bankrolling several expensive residences and luxurious family locations. In a statement, Nissan acknowledged on Monday that an “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. … 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 news had led to a tumble in the manufacturers’ stocks and a scramble to respond. While Ghosn is still the current Chairman and Chief Executive officer at Renault, Mr. Thierry Bolloré has been appointed on a temporary basis as the company’s Deputy Chief Executive Officer. Mitsubishi, the most recent acquisition of the group in 2016, called for Ghosn’s immediate removal in their press release.
Ghosn’s arrest is a sharp reversal of a long streak of good fortune for the auto executive. Born in Brazil to Lebanese parents, Ghosn moved with his mother and sister back to Lebanon when he was six and then on to France for schooling, eventually becoming a citizen of all three countries. He started his career with Michelin tires, earning distinction when he reorganized and revitalized the South American market after becoming Chief Operating Officer of the region in 1985.
In 1996, the then failing Renault hired Ghosn and since then the man has not turned back, helping grow the company into a global contender. Under his leadership, Renault restructured its operations and allied itself with Nissan. By 2008, Ghosn was the chairman, president, and CEO of Nissan, and when the company acquired Mitsubishi Motors in 2016, he was brought on as the latter’s chairman.
Through it all, Ghosn has emerged as a celebrity, hugely popular in Lebanon, France, and Japan. His life even served as the source for a manga comic series titled The True Story of Carlos Ghosn. Now, however, critics are coming forward and an otherwise impressive legacy is being challenged by perhaps one of the largest financial scandals to hit the automotive world.
At this time, Ghosn is being detained in Japan where a court has granted police a ten-day extension for further investigation. During this time he may meet with his lawyer and has already met with the French ambassador to Japan, but neither can be present during interrogation periods. Should they wish, the authorities can request another ten-day extension, after which point Ghosn must be charged or released.
Monday’s arrest of Carlos Ghosn, who serves as Chairman and CEO of Renault and the Renault–Nissan–Mitsubishi Alliance, as well as chairman of Nissan Motors and Mitsubishi Motors, has sent shockwaves through the industry. Ghosn, along with Nissan’s director Greg Kelly, is being held by Tokyo police for false accounting charges.
The arrests could prove devastating for the Alliance, one of the top car sellers globally. Currently, the market is facing uncertainty due to economic changes and possible shifts in trade policies. The information provided by a whistleblower within the company alleges that Ghosn had the company bankrolling several expensive residences and luxurious family locations. In a statement, Nissan acknowledged on Monday that an “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. … 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 news had led to a tumble in the manufacturers’ stocks and a scramble to respond. While Ghosn is still the current Chairman and Chief Executive officer at Renault, Mr. Thierry Bolloré has been appointed on a temporary basis as the company’s Deputy Chief Executive Officer. Mitsubishi, the most recent acquisition of the group in 2016, called for Ghosn’s immediate removal in their press release.
Ghosn’s arrest is a sharp reversal of a long streak of good fortune for the auto executive. Born in Brazil to Lebanese parents, Ghosn moved with his mother and sister back to Lebanon when he was six and then on to France for schooling, eventually becoming a citizen of all three countries. He started his career with Michelin tires, earning distinction when he reorganized and revitalized the South American market after becoming Chief Operating Officer of the region in 1985.
In 1996, the then failing Renault hired Ghosn and since then the man has not turned back, helping grow the company into a global contender. Under his leadership, Renault restructured its operations and allied itself with Nissan. By 2008, Ghosn was the chairman, president, and CEO of Nissan, and when the company acquired Mitsubishi Motors in 2016, he was brought on as the latter’s chairman.
Through it all, Ghosn has emerged as a celebrity, hugely popular in Lebanon, France, and Japan. His life even served as the source for a manga comic series titled The True Story of Carlos Ghosn. Now, however, critics are coming forward and an otherwise impressive legacy is being challenged by perhaps one of the largest financial scandals to hit the automotive world.
At this time, Ghosn is being detained in Japan where a court has granted police a ten-day extension for further investigation. During this time he may meet with his lawyer and has already met with the French ambassador to Japan, but neither can be present during interrogation periods. Should they wish, the authorities can request another ten-day extension, after which point Ghosn must be charged or released.
