Nissan shareholders vote to remove Carlos Ghosn from company board

Roman Schwartz
April 10, 2019

Nissan Motor Co. shareholders chose to remove former boss Carlos Ghosn from the board on Monday, as the former chairman faces several accusations of financial misconduct that landed him in prison.

Their talks came a day after the Tokyo District Court ruled that Ghosn must remain in custody until at least April 14 following his re-arrest last week.

On April 4, Ghosn was rearrested by Tokyo prosecutors over new allegations of aggravated breach of trust, related to funds essentially being transferred through a Nissan dealership in Oman and back to himself, causing Nissan a loss of around 5 million US dollars, according to prosecutors.

However, Ghosn has denied the allegations and described his re-arrest as "outrageous and arbitrary".

Under Japanese law, prosecutors will be able to hold Ghosn for up to 22 days without charging him.

Ghosn faces multiple charges related to allegations that he under-reported his Nissan salary, temporarily transferred his own financial losses to Nissan's books during the 2008 global financial crisis, and made suspicious payments using company funds to businesses in Saudi Arabia, Lebanon, and Oman.

However, the new allegation is potentially more serious, as it could show that he used company funds for his own purposes.

"I deeply, deeply apologize for all the worries and troubles we have caused", he said.

The meeting also saw shareholders vote to remove Greg Kelly, a United States executive who served as Ghosn's right-hand man and who also faces charges in Japan, and approve a motion to replace Ghosn with Renault chairman Jean-Dominique Senard.

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Proceedings were at times interrupted by some hecklers on the floor of the meeting, which was attended by a near record-high 4,100 shareholders.

Also on the ballot agenda is the removal of Greg Kelly, a board member who is charged with collaborating with Ghosn in the alleged misconduct.

Shareholders then filled Ghosn's seat on the board with new Renault SA chairman Jean-Dominique Senard.

At its ordinary shareholders' meeting in June, Nissan will decide on transforming itself into a firm with a governance structure of nominating and other statutory committees that clearly separate business execution and oversight of management.

"The situation seems to go deeper than it looks based on the information", said 68-year-old shareholder Roberto Montoya.

Ghosn kept a low profile during his short-lived period of conditional release, but did appear on Twitter shortly before his new arrest to announce a news conference promising "to tell the truth about what's happening". The FCCJ said on its website that a video of Ghosn defending himself will be shown on Tuesday from 3 p.m.

Saikawa said Nissan may claim damages against Ghosn and that he did not want to pay severance to the former chair.

Mr Saikawa told shareholders the company will stick by the alliance, fix its governance problems and make the ouster of Ghosn "a turning point". "I will constantly suggest the best possible evolutions in the framework of the alliance".

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