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Nissan's Ghosn crisis

Nissan removes Ghosn from board, marking end of an era

Dismissal opens way for governance reform with check on chairman's power

Members of Nissan's top management apologize to shareholders at the beginning of the shareholders meeting on April 8 in Tokyo.   © Kyodo

TOKYO/PARIS -- Nissan Motor removed former Chairman Carlos Ghosn from its board at an extraordinary shareholders meeting on April 8, formally ending his 19-year reign at the Japanese automaker.

Nissan shareholders voted to strip him of the title of director and to elect Renault Chairman Jean-Dominique Senard in his place. 

"Today marks a significant milestone in terms of our response to financial misconduct," Nissan CEO Hiroto Saikawa said in reference to allegations against the former chairman, who is currently in detention at a Tokyo jail after his arrest on charges of aggravated breach of trust on April 4. Ghosn denies all charges.

Saikawa added that his priorities now would be to stabilize Nissan's business, build up its governance structure and steady the alliance, especially with French partner Renault.

"Nissan as a corporation takes its responsibilities very seriously, so we are moving at full power to fulfill our responsibilities today and in the future," Saikawa said.

Saikawa apologized repeatedly for the turbulence caused by the investigation and arrest of the former chairman. However, that was not enough for some shareholders who questioned whether management could really have been ignorant of the alleged misconduct. One investor suggested  Saikawa had been "discredited" as chief executive, as he was part of a management team that had not had "enough courage" to challenge Ghosn. 

The Nissan CEO sought to focus on the changes to come from an overhaul under a new leadership team. Nissan seeks to change a corporate structure in which the former chairman held virtually unchecked power. Specific measures to reform Nissan's governance structure are expected to be discussed at the annual general shareholders meeting slated for June, hoping to put the three-way alliance with Renault and Mitsubishi Motors on a growth track.

A panel of experts announced recommendations for Nissan last month that included a clear separation of oversight and executive functions. Based on these recommendations, Nissan is expected to propose the establishment of committees for nomination, auditing and compensation at the June meeting.

Nissan had said in January that it planned to name Senard as a director, and the automaker announced last month that it hopes to receive him as vice chairman of the board.

"I hope that [Senard] will join our board and we can discuss governance reforms," Saikawa said.

Meanwhile, Ghosn's wife Carole departed Japan for France without complying with a request from prosecutors that she answer questions voluntarily. On April 7, French newspaper Le Journal du Dimanche published an interview with Carole, who said she "felt in danger" staying in Japan.

Carlos Ghosn, accompanied by his wife Carole Ghosn, arrives at his place of residence in Tokyo on March 8.   © Reuters

Upon arriving in Paris, Carole said Japanese authorities had confiscated her Lebanese passport but that she still possessed her U.S. passport. She noted that Laurent Pic, the French ambassador to Japan, accompanied her to the airport in Japan on the evening of April 5.

Carole said that French President Emmanuel Macron promised to do everything in his power to help, in response to her appeal for the president to intervene in the matter. She said wants her husband to receive a fair trial.

According to his wife, Carlos Ghosn wanted to become a professor to help young people after serving as head of the auto alliance.

The former alliance chief was arrested for the fourth time on April 4, this time on new charges alleging misuse of corporate money. He previously was charged with financial misconduct involving the underreporting of his compensation, as well as with aggravated breach of trust tied to personal trading losses.

The article has been amended to remove an inaccurate interpretation of Carole Ghosn's comments to Le Journal du Dimanche.

Nikkei staff writer Eri Sugiura contributed to this report.

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