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Nissan board removes chairman, director for violations

By Allen Cone
Carlos Ghosn was removed as chairman by Nissan's board of directors Thursday. File Photo by Keizo Mori/UPI | <a href="/News_Photos/lp/b38009dad57f341d1df8c4b817d1f852/" target="_blank">License Photo</a>
Carlos Ghosn was removed as chairman by Nissan's board of directors Thursday. File Photo by Keizo Mori/UPI | License Photo

Nov. 22 (UPI) -- Nissan's board of directors on Thursday voted unanimously to remove Carlos Ghosn as chairman and representative director, and another director, Greg Kelly, for under-reporting compensation amounts to the Tokyo Stock Exchange securities report.

Ghosn was arrested Monday for allegedly understating his income by about $44 million over the past five years.

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The Tokyo Prosecutors Office said that Ghosn is being held in a Tokyo detention center.

Nissan, the Japanese-based automaker, will form an advisory committee to propose nominations from the board of directors for Ghosn's replacement, according to its website. In addition, a separate committee will review Nissan's governance and executive pay.

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"The board acknowledged the significance of the matter and confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimize the potential impact and confusion on the day-to-day cooperation among the Alliance partners," the company said on its website.

On Tuesday, French-based Renault announced that its board had appointed Chief Operating Officer Thierry Bollore as acting head to replace Ghosn as its chairman and CEO.

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Nissan has partnered with French manufacturer Renault since 1999.

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Nissan and the French government each own 15 percent of Renault. And Renault holds a 43 percent stake in Nissan.

Alliance partner Mitsubishi Motors will also convene a board meeting next week to remove Ghosn as its chairman.

Renault-Nissan-Mitsubishi is the world's largest automotive partnership, with combined sales of more than 10.6 million vehicles in calendar year 2017, according to Nissan.

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Nissan CEO Hiroto Saikawa, who joined the company in 1977, also will serve as temporary chairman.

"We can acknowledge that the allegations are surely something we cannot accept as a company," Saikawa said at a press conference Monday after Ghosn's arrest. "Experts have also determined that these serious improprieties warrant his dismissal. It is upon this that we have decided to propose his removal."

The prosecutor said Ghosn and Kelly conspired to understate Ghosn pay at Nissan from 2010 to 2015 -- half the actual $88.5 million.

Also, a Dutch subsidiary allegedly paid him undisclosed income, using Nissan funds to purchase luxury homes for him overseas.

Ghosn earned $8.4 million from Renault, $6.52 million from Nissan and $1.95 millon from Mitsubishi in fiscal 2017, according to security filings reported by CNBC.

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Ghosn's wrongdoing was first brought to light by a whistleblower's internal report. After Nissan's auditors began a wider investigation, the evidence was then passed to Japan's public prosecutor.

"Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation," the company said in a news release Monday. "We will continue to do so.

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