Carlos Ghosn’s arrest: what we know

General Information

Carlos Ghosn, CEO of Renault and chairman of the board of Nissan and Mitsubishi Motors, was still in custody Tuesday on suspicion of financial malpractice in Tokyo. 

Here is what we know about this case that shakes the global automotive sector:

The alleged facts

Carlos Ghosn, arrested on Monday, has been interrogated since for concealment of income. His custody can last up to 23 days for this single arrest.

According to preliminary reports in the press, Ghosn allegedly minimized his revenues by around 5 billion yen (about C $ 58 million) over five years from 2011. According to Nissan, he is also suspected of social goods.

According to Japanese media, a subsidiary of Nissan financed the purchase of luxury homes in four countries, properties in which Mr. Ghosn went for free as he pleased. In addition, according to the NHK public channel, he allegedly pocketed sums declared on behalf of other directors of Nissan.

Moreover, the French administration has not identified any tax evasion in France from Mr Ghosn, said Tuesday the Minister of Economy Bruno Le Maire.

Internal investigation

The arrest of the star boss as well as one of his collaborators, Greg Kelly, arose from an investigation conducted for several months within the group after an internal complaint.

According to the media, a law will be applied for the second time since its recent entry into force. It will allow those who collaborate with the investigators to obtain a reduction of sentence if it turns out that they were aware of the facts alleged against Mr. Ghosn.

Eviction of Nissan and Mitsubishi

Nissan convenes extraordinary board of directors on Thursday to fire Carlos Ghosn as president of this body

Mitsubishi Motors (MMC) will also “propose to the board of directors to quickly remove Carlos Ghosn from his title of president”. The automaker will conduct its own internal investigation to determine if Ghosn has committed similar malfeasance within MMC.

Jerking off at Renault

Renault’s board of directors is scheduled to meet on Tuesday “during the day”. 

The French State, a 15% shareholder, has called for the establishment of interim governance, having noted that Mr Ghosn is no longer in a position to lead the group, said the Minister of the Economy, Bruno The mayor.

Carlos Ghosn had appointed in February a number two, Thierry Bolloré, called to succeed him at the head of the French manufacturer. 

The objective at the time was already to reassure the public authorities on the future of Renault, concerned today by the “stability” of the manufacturer, said Le Mayor.

The French administration has not identified any tax fraud in France from Mr Ghosn, he assured Tuesday.

Fuzzy future for the alliance

If Carlos Ghosn is not irreplaceable at Nissan or Mitsubishi Motors and already has a successor appointed within Renault, his lapse appears more problematic for the alliance Renault-Nissan-Mitsubishi Motors which he was the linchpin. 

Late Monday morning, French President Emmanuel Macron said the French state would be “extremely vigilant to the stability” of Renault and the alliance with Nissan.

“This case is not likely to affect the alliance between the three entities,” promised Nissan boss Hiroto Saikawa, while considering that the consequences would undoubtedly be important for Renault.

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