Nissan shares tumble after chairman's arrest
November 20, 2018
Shares in Nissan Motor Co. dipped 5.5 percent in Tokyo and Renault's fell 8 percent in Paris on Tuesday, a day after high-flying chairman Carlos Ghosn was arrested on suspicion of falsifying financial reports and other misconduct.
The 64-year-old Ghosn was arrested on Monday in Tokyo and is being held as prosecutors conduct an investigation into allegations that he underreported his income by around 5 billion yen ($44.5 million, €38.8 million) over five years.
Nissan and Mitsubishi, two parts of the Nissan-Mitsubishi-Renault alliance Ghosn led, have announced their intention to remove him as chairman.
Unfit to lead Renault
France's finance minister Bruno Le Maire said on Tuesday that after his arrest, Ghosn was no longer fit to be at the helm of Renault.
"Carlos Ghosn is no longer in a position capable of leading Renault," Le Maire told France Info radio. He said France's priority was to ensure continuity and stable governance of the French car giant.
The French automaker announced it would be holding a board meeting later on Tuesday to discuss interim management while Ghosn is detained.
Japanese corporate governance
Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan said for Nissan: "this incident will make investors review if Japanese corporate governance is working."
Ghosn: "basically deprived Nissan's shareholders of opportunities to judge if the amount of his salary was appropriate," Ibayashi said.
It is unclear how long Ghosn could be held in prison, or even when prosecutors would officially announce the charges against him.
gs,/jm(AFP, Reuters)