On Monday 19th November 2018 Carlos Ghosn was arrested at Tokyo airport and accused by Japanese Regulators of misleading investors on the size of his salary and misusing company assets for personal gain. On the day of his arrest, Mr Ghosn was the Chairman of Nissan, CEO of Renault and Chairman of Mitsubishi.
The Board of Nissan comprising of 9 directors after a 4 hour emergency board meeting on Thursday 22nd November unanimously voted for Mr Ghosn’s dismissal as Chairman of Nissan.
According to Japanese sources it is alleged that he had understated his income by half in an alleged violation of Japan’s Financial Instruments and Exchange Act. In addition, allegations have been made about Nissan subsidiaries being used to purchase property for Mr Ghosn in Lebanon and Brazil. A contract between Nissan and Mr Ghosn’s sister is also currently being investigated.
Nissan’s corporate governance has been much criticised by corporate governance experts in recent years. Many experts felt that Mr Ghosn had amassed too much power. In 2018 Nissan does not have any board committees. There is therefore currently very little oversight of remuneration, appointments and auditing. It was only in this year that two independent directors were appointed – neither of these directors had a strong background in business (one was a retired racing driver).