Carlos Ghosn, chairman of Nissan, Renault and Mitsubishi Motors, was arrested Monday in Japan over concerns he had underreported his income and misused company funds.
In a statement, Nissan said it had been conducting an internal investigation over the past several months regarding misconduct involving Ghosn and Representative Director Greg Kelly based on a whistleblower report.
According to the company, the investigation discovered that over many years both Ghosn and Kelly had been reporting their compensation in the Tokyo Stock Exchange securities report as less than what they actually received, the aim being to reduce Ghosn’s disclosed compensation.
Nissan also discovered “numerous other significant acts of misconduct, such as personal use of company assets” related to Ghosn, with “Kelly’s deep involvement also confirmed”, according to a statement.
The company says it has been providing information to the Japanese Public Prosecutors Office and is fully cooperating with their investigation.
In a dramatic move, the company said CEO Hiroto Saikawa will propose to the company board to promptly remove Ghosn from his positions as Chairman and Representative Director, as well as removing Kelly from his own Representative Director position. The company cited the misconduct’s violation of its board of directors’ duty of care as the reason for the move.
The development heavily tarnishes what was a distinguished career for Ghosn, who helped restore Renault’s profitability in the late 1990s and executed the recovery of Nissan in just one year in the early 2000s.