This is one of the most shocking new stories to hit Japan this year. Carlos Chosn, chairman of the alliance between Nissan Motor Co and Renault SA and Mitsubishi Motors Corp., was arrested Monday over alleged underreporting of his income and misuse of company funds. Mr Ghosn and Nissan Representative Director Greg Kelly are alleged to have conspired to underreport Ghosns salary for several years. The total amount alleged is Yen 5 billion over five years from 2011 to 2015 according to sources. In addition, it is alleged that company assets were used for personal purposes.
Nissan is cooperating with prosecutors by providing information on the matter. According to one one source, the misdeeds had “not really come to the surface” which can be interpreted as the information was controlled by top management combined with a level of little transparency. Some sources feel that the attack on Ghosn was a “coup d`etat” as others stressed that there was no such movement within the firm.
Ghosn was one of the best paid executives among Japanese companies, a fact that is sometime attacked in the Japanese press. So it is safe to say that he was a target for some. Renault shares dropped by 10 percent compared to the close on Friday. The pubic in Japan, some seeing Ghosn as a savior for the company has been in shock since the announcement. Clearly he is well regarded in some circles.
He joined the company in 1999 as chief operating officer and turned the company around from near bankruptcy. He did have some enemies in the steel industry as he initiated competition among steel markets, reducing costs for Nissan. There are some who think that this arrest is the first, starting with a foreign company head, then will turn into a purge of Japanese CEOs and Presidents. In short, the gaijin was the warning sign before the next wave of locals being arrested.
More on this story in the coming weeks