Nissan chairman, senior executive arrested
  • Wednesday, December 12, 2018
  • 79°

Hawaii News

Nissan chairman, senior executive arrested

  • ASSOCIATED PRESS

    “Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment.”

    Hiroto Saikawa

    CEO, Nissan

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YOKOHAMA, Japan >> Nissan Chairman Carlos Ghosn, who became one of the auto industry’s most powerful executives by engineering a turnaround at the Japanese manufacturer, was arrested Monday and will be fired for allegedly underreporting his income and misusing company funds, the automaker said.

The scandal reverberated across the globe and abruptly threw into question Ghosn’s future as leader of the Renault-Nissan-Mitsubishi alliance, which sold 10.6 million cars last year, more than any other manufacturer.

Nissan CEO Hiroto Saikawa said Ghosn was taken into custody after being questioned by prosecutors upon arriving in Japan earlier in the day. Ghosn is of French, Brazilian and Lebanese background and lives in both France and Japan.

Nissan said Ghosn, 64, and another senior executive, Greg Kelly, were accused of offenses involving millions of dollars that were discovered during a months-long investigation set off by a whistleblower. Kelly was also arrested.

“Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment,” Saikawa said, apologizing for a full seven minutes at the outset of a news conference.

Yokohama-based Nissan Motor said it is cooperating with prosecutors in their investigation.

Saikawa said Nissan’s board will vote Thursday on dismissing Ghosn and Kelly, whom he described as the mastermind of the alleged abuses.

“This is an act that cannot be tolerated by the company,” he said. “This is serious misconduct.”

Saikawa said three major types of misconduct were found: underreporting income to financial authorities, using investment funds for personal gain and illicit use of company expenses.

Ghosn was at Nissan for 19 years and signed a contract this year that would have run through 2022. His compensation, high by Japanese standards, has been a source of controversy over the years.

According to NHK and the Kyodo News Service, Nissan paid Ghosn nearly 10 billion yen ($89 million) over five years through March 2015, including salary and other income, but he reported receiving only about half that amount.

Ghosn is credited with helping bring about a remarkable turnaround at Nissan, resuscitating it from near bankruptcy by cutting thousands of jobs and shutting plants. His triumph made him something of a national hero in a country where foreign CEOs of major Japanese companies are relatively rare.

He also looms large in France, where he previously turned around Renault and made it into a global player, notably in electric vehicles. He led the French carmaker through major job cuts and an expensive and contentious bailout, earning the nickname “Le Cost Cutter.”

Ghosn became a nemesis of French unions and left-wing politicians, who saw him as a symbol of capitalism’s excesses, particularly its rich executive pay packages.

Renault shareholders in 2016 voted against Ghosn’s pay package as too generous, but the board ignored the move.

ON THE MOVE

Bank of Hawaii has announced the following new hires:

>> Forrest Dell as vice president and data governance manager of its Data Automation & Reporting Department. Dell was a senior analytical banking consultant at ifb Group in Charlotte, N.C. He has four years’ experience in IT audit and data governance.

>> Maria C. Montero as vice president and audit supervisor of its Internal Audit Department. Montero comes from First Hawaiian Bank where she served as vice president of internal audit. She has 10 years’ experience in audit and financial services.

>> Robin Stueber as vice president and private banking relationship manager in the Professional Services Group of the bank’s Private Banking Department. Stueber has more than 20 years of experience including previously serving Bank of Hawaii from 1994 to 2000 as vice president, sales manager and investment program director of Bancorp Investment Group. Her most recent position was with Experian as a senior account executive.

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