Nissan says chairman Ghosn to be dismissed for misconduct

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Public broadcaster NHK reported that Tokyo prosecutors were raiding Nissan's headquarters in the city of Yokohama.

Carlos Ghosn should not remain in charge of Renault following his arrest in Japan over claims of "misconduct", the French finance minister has said.

A day after the dramatic fall from grace of the 64-year-old, a towering figure in the automotive industry, the sources said Tokyo prosecutors believe these costs shouldered by the Japanese company should have been reported as part of the remuneration he received from the company in securities reports.

Nissan was not available for comment on the reports when contacted by Bloomberg News, and attempts to obtain comment from Ghosn or his representatives were unsuccessful.

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Le Maire said Ghosn, who serves as CEO of Renault, was "de facto no longer in a position to lead the group" and called for an "interim leadership".

Karen Brenner, clinical professor of business at New York University Stern School of Business, says the Ghosn situation shows that "boards have to be really alert, especially in good times".

Chairman Carlos Ghosn was arrested on November 19 by Tokyo prosecutors on suspicion of under-reporting his income in violation of the Financial Instruments and Exchange Act, according to people close to the investigation.

Ghosn had been criticized for his salary of about $9 million ー exorbitant by Japanese standards.

In Japan, Ghosn's nickname was "Le Cost Cutter".

But in a 90-minute news conference late Monday night, Nissan's CEO Hiroto Saikawa said Ghosn had too much power and the company was overdue for some change.

Nissan Motor Chairman Carlos Ghosn has been arrested by Tokyo authorities, the carmaker said Monday, and is expected to be fired by the company at a Thursday board meeting.

Kelly was also arrested on November 19 on suspicion of conspiring with Ghosn to under-report the Nissan chairman's income on annual securities reports.

The infractions are said to have occurred "over many years".

Under Japanese law, a suspect can be detained by prosecutors for up to 20 days before being charged or released.

"While I think [this news] will have an impact, especially on Renault, this is just essentially about correcting a serious misconduct, and is not a matter that should hurt our partnership with Renault, Nissan, and Mitsubishi", he said. He has met repeatedly with the past four French presidents; no major economic event in France was held without Ghosn.

Japanese media reported that Ghosn had reported around 10 billion yen (US$88.6 million) worth of compensation as about 5 billion yen. He said as recently as last month that he planned to stay on until 2020, although he stepped down from the top job at Nissan a year ago, amid reports that the companies plan to change the alliance's structure, possibly through a merger.

Renault's shares, listed in Paris, plummeted after Nissan confirmed reports of its chairman's alleged misconduct. That Franco-Japanese axis, which also now includes Mitsubishi, is one of the world's biggest carmakers.