Nissan to dismiss Carlos Ghosn, head of industry's largest global alliance, after arrest



Shares of Japan's second-largest car manufacturer as well as France's Renault plunged following a report that Carlos Ghosn, Nissan chairman and chief executive of the Renault-Nissan-Mitsubishi alliance, was arrested on allegations of financial trading misconduct. Nissan's board of directors plan to dismiss him on Thursday.

Mr Ghosn was arrested on Monday on suspicion of under-reporting his corporate salary. A Brazilian-French citizen of Lebanese descent who has been with Nissan since 1999, Mr Ghosn heads the world's largest automaker alliance. He voluntarily went with Tokyo prosecutors, who arrested him after questioning, according to Japanese newspaper Asahi.

Nissan will propose dismissing Mr Ghosn and board member Greg Kelly, who was also arrested for financial misconduct, according to a statement from the company, which said a whistleblower set off a months-long investigation of the two men.

"The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation," Nissan said in a statement on Monday.

“In regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.”

Mr Ghosn under-reported his income by as much as $44 million (Dh161m) over the course of five years, according to Kyodo news agency.

Renault shares fell as much as 15 per cent in Paris on Monday, the lowest in almost four years in the wake of the scandal, while Nissan global depository receipts dropped more than 11 per cent.

Nissan will appoint third party investigators made up of external directors to get to the bottom of the misconduct, Hiroto Saikawa, Nissan's chief executive said at a press conference on Monday. He said the revelations of criminal activity are the dark side of Mr Ghosn's long reign at the automaker and that "overly concentrated power in one individual led to distortion".

"“Nissan cannot accept this conduct," Mr Saikawa said.

“With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership,” wrote Liam Proud, a columnist for Reuters’ Breakingviews. “That’s a big problem if he’s no longer there.”

The leadership crisis underscores the importance of sound corporate governance, said Khalid Howladar, managing director and founder at Acreditus, a risk advisory firm in Dubai, and provides a cautionary tale to the Middle East that is still solidifying its corporate governance policies.

“The precipitous drop in the share price underscores both the importance of corporate governance for investors and the obviously key role of the CEO in the company’s value,” Mr Howladar said.

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Sent to Japan by Renault in 1999 following the formation of the Renault-Nissan-Mitsubishi Alliance, Mr Ghosn burnished his name as an industry maverick as the architect of Nissan’s turnaround.

He is credited with transforming the company from near-bankruptcy to profitability within two years and steering the car maker into an expansion in China, one of Nissan's key markets by volume.

He joined Nissan as chief operating officer in June 1999 and served as chief executive from June 2001 until April 2017, when he was succeeded by Hiroto Saikawa.

Mr Ghosn was named chief executive of Groupe Renault in May 2005, becoming the first person to run two global Fortune 500 companies simultaneously. In 2009, he was also appointed chairman of the board. He is Chairman and chief executive of the Renault-Nissan Alliance, one of the world's largest automotive groups. Renault, Nissan, Mitsubishi Motors and AVTOVAZ together sold 9.96 million vehicles in 2016 – more than one in nine cars worldwide.

With the arrest, Mr Ghosn’s role as chief executive of the Renault-Nissan-Mitsubishi Alliance hangs in the balance. 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 last year, amid reports that the companies plan to change the alliance’s structure, possibly through a merger.

France's President Emmanuel Macron said on Monday it was too early to comment.The French government is a 15 per cent stakeholder in Renault.

Nissan forecast a flat year in 2018 for the Middle East car market, as still-slow economic growth and the introduction of VAT has taken a toll on consumption, the company’s regional director said in June.

Total auto sales across the Middle East dropped 9 per cent year-on-year in 2017, and by 11 per cent in the GCC, according to Nissan’s financial report for the first half of 2018.

The National was unable to reach Nissan's spokesman Nicholas Maxfield for comment.

Tokyo stocks opened lower on Tuesday with shares in Nissan diving more than six percent and Mitsubishi also plunging after chairman Carlos Ghosn was arrested over allegations of financial misconduct.

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

Karwaan

Producer: Ronnie Screwvala

Director: Akarsh Khurana

Starring: Irrfan Khan, Dulquer Salmaan, Mithila Palkar

Rating: 4/5

Company Profile

Name: Raha
Started: 2022
Based: Kuwait/Saudi
Industry: Tech Logistics
Funding: $14 million
Investors: Soor Capital, eWTP Arabia Capital, Aujan Enterprises, Nox Management, Cedar Mundi Ventures
Number of employees: 166

The biog

Favourite food: Tabbouleh, greek salad and sushi

Favourite TV show: That 70s Show

Favourite animal: Ferrets, they are smart, sensitive, playful and loving

Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can

Name of first pet: Eddy, a Persian cat that showed up at our home

Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big

Tips to keep your car cool
  • Place a sun reflector in your windshield when not driving
  • Park in shaded or covered areas
  • Add tint to windows
  • Wrap your car to change the exterior colour
  • Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
  • Avoid leather interiors as these absorb more heat
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Director: Ali Abbasi

Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong

Rating: 3/5

Herc's Adventures

Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5

UAE currency: the story behind the money in your pockets
Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

Sweet Tooth

Creator: Jim Mickle
Starring: Christian Convery, Nonso Anozie, Adeel Akhtar, Stefania LaVie Owen
Rating: 2.5/5

RESULT

Esperance de Tunis 1 Guadalajara 1 
(Esperance won 6-5 on penalties)
Esperance: Belaili 38’
Guadalajara: Sandoval 5’

What you as a drone operator need to know

A permit and licence is required to fly a drone legally in Dubai.

Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.

It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.

“We are teaching people how to fly in accordance with the laws of the UAE,” said Ahmad Al Hamadi, a trainer at Sanad.

“We can show how the aircraft work and how they are operated. They are relatively easy to use, but they need responsible pilots.

“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.

“You cannot fly a drone without registration under any circumstances.”

Larger drones are harder to fly, and have a different response to location control. There are no brakes in the air, so the larger drones have more power.

The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.

“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.

“Operators must undergo proper training and certification to ensure safety and compliance.

“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”

The specs

Engine: four-litre V6 and 3.5-litre V6 twin-turbo

Transmission: six-speed and 10-speed

Power: 271 and 409 horsepower

Torque: 385 and 650Nm

Price: from Dh229,900 to Dh355,000

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

COMPANY PROFILE

Name: Rain Management

Year started: 2017

Based: Bahrain

Employees: 100-120

Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund

Strait of Hormuz

Fujairah is a crucial hub for fuel storage and is just outside the Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.

The strait is 33 km wide at its narrowest point, but the shipping lane is just three km wide in either direction. Almost a fifth of oil consumed across the world passes through the strait.

Iran has repeatedly threatened to close the strait, a move that would risk inviting geopolitical and economic turmoil.

Last month, Iran issued a new warning that it would block the strait, if it was prevented from using the waterway following a US decision to end exemptions from sanctions for major Iranian oil importers.

The specs

Engine: 1.6-litre 4-cyl turbo

Power: 217hp at 5,750rpm

Torque: 300Nm at 1,900rpm

Transmission: eight-speed auto

Price: from Dh130,000

On sale: now