Nissan votes to dismiss chairman over financial misconduct

Nissan announced Thursday that its board had voted to dismiss the auto company’s chairman and another top executive over financial misconduct.

The Japanese auto manufacturer said in a press release that Director and Chairman Carlos Ghosn and Representative Director Greg Kelly had both been dismissed.

Authorities arrested the pair on claims that Ghosn was underreporting his salary by millions of dollars and using company assets for personal use with Kelly’s help.

Ghosn will remain a board director unless a shareholder vote removes him from that role as well.

{mosads}The car manufacturer also said it would set up an outside special committee to strengthen its rules surrounding director compensation as well as an advisory panel of external directors to aid in the search for a new chairman.

Nissan released a statement Monday saying it was conducting an internal investigation, spurred by a whistleblower report, into Ghosn’s financial practices.

The company confirmed it had passed information it found regarding misconduct on to the Japanese Public Prosecutors Office and would continue to cooperate with its investigation. 

The company said the decision was unanimous and its goal was to “minimize the potential impact and confusion on the day-to-day cooperation,” referring to the company’s alliance with Mitsubishi and Renault, which was negotiated by the 64-year-old Ghosn. 

“At the beginning of the session, the board acknowledged the significance of the matter and confirmed that the long-standing Alliance partnership with Renault remains unchanged,” Nissan added.

Investors fear the arrest and dismissal of the alliance’s creator could throw its future into jeopardy, particularly regarding Nissan’s relationship with Renault. Ghosn was reportedly planning a merger between the two companies before his arrest. 

“It could turn into a showdown between the two sides. It’s fair to say that there is scope for unintended consequences of this drama,” analyst Christopher Richter told the Financial Times.