Imprisoned Carlos Ghosn loses last Nissan title in shareholder vote

Investors approved his removal from the board at an extraordinary shareholders’ meeting in Tokyo on Monday

Shareholders wait in line to enter the venue of a Nissan extraordinary shareholders' meeting in Tokyo on Monday, April 8. They voted to remove him from the board following his arrest on alleged financial crimes. BloombergShow less

Nissan severed its two-decade connection to former saviour Carlos Ghosn as shareholders removed the former chairman and chief executive officer from its board following his arrest on numerous alleged financial crimes.

Mr Ghosn, detained in a Tokyo jail, was voted out as director and is being replaced by Renault chairman Jean-Dominique Senard, who joins Nissan’s board as vice chairman. Investors approved the change at an extraordinary shareholders’ meeting in Tokyo on Monday that Nissan agreed to hold at the request of largest owner Renault.

Nissan, which swiftly removed Mr Ghosn as chairman days after his November 19 arrest, is seeking to turn over a tumultuous chapter in its ties with Renault. The sudden arrest of the former global auto titan derailed their partnership, the world’s biggest auto alliance, as the companies were diverged initially over whether to oust Mr Ghosn, 65. The partners set up a new alliance governance structure last month, led by Mr Senard, 66, which is designed for smoother and more equitable decision-making.

“It looks like Renault is now on the same page with Nissan,” Tatsuo Yoshida, an analyst at Sawakami Asset Management, said before the meeting. “The extraordinary shareholder meeting is just a formality. But we do want to make sure the management and governance restructuring doesn’t get delayed by any unexpected development.”

After being freed on bail for almost a month, Mr Ghosn was arrested again last week on fresh allegations that he used millions of dollars from Nissan for his own purposes and is set to be detained at least until April 14. Mr Ghosn, who remains on the board of Renault and third alliance partner Mitsubishi for the time being, faces a trial that is still months away. His lawyer is planning to release a video pre-recorded by Mr Ghosn in case of his rearrest on Tuesday.

Mr Ghosn and Greg Kelly, his gatekeeper and confidant, were arrested on suspicion of financial misconduct, thanks to a whistle-blowing tip from inside Nissan. Mr Ghosn has vigourously denied one set of charges that he transferred personal trading losses to the automaker and under-reporting his income. Mr Kelly, who was charged as a co-conspirator, is also free on bail and has denied wrongdoing. Nissan was charged in December for understating Mr Ghosn’s income.

Mr Kelly was also voted out as director on Monday.

Nissan has said its internal investigation has uncovered “substantial evidence of blatantly unethical conduct” by Mr Ghosn. The company received a report from an external panel last month that the former chairman’s long tenure at Nissan led to power being “concentrated in his hands” and called for measures to improve the carmaker’s governance.

One shareholder, who didn’t identify himself, stood up to berate Nissan’s management, saying that they should also be held responsible for the scandal and “should resign once and for all”.

Nissan chief executive Hiroto Saikawa, Mr Ghosn’s protege-turned-accuser, said the company would investigate and fix the lapses that led to the current situation, and work on improving its governance. He also said Nissan may claim damages against its former chairman. “Today is a key turning point for Nissan,” Mr Saikawa said.

Further down the road, Nissan and Renault may seek to address the imbalance in their capital ties that has been a source of tension between the companies, Mr Yoshida said. Renault has a 43 per cent voting stake in Nissan, which has no reciprocal rights with its 15 per cent stake in its French partner.

“The complete overhaul of the alliance structure is on their agenda, but maybe it’s not an immediate item,” Mr Yoshida said. “There’s no need for them to tackle it now.”