Carlos Ghosn arrested

Nissan Chairman Carlos Ghosn has been arrested in Tokyo over claims of financial misconduct. The company’s Chief Executive Hiroto Saikawa said, Ghosn will be sacked from the Japanese firm after a board meeting on Thursday.

Ghosn, a towering figure in the car industry, has been accused of significant acts of misconduct, including under-reporting his pay package and personal use of company assets.

Nissan Motor used to pay to its executives nearly 9 million dollars less than the amount approved at its annual shareholders’ meeting. Tokyo prosecutors suspect part of the amount may have gone to Chairman Carlos Ghosn.

Ghosn was arrested on Monday on suspicion of underreporting his income by about 44 million dollars over the 5-year period up until March 2015. Another Nissan executive, Greg Kelly, was also arrested.

Since 2010, the shareholders’ meeting approved that an annual combined sum of about 27 million dollars be paid to its executives.

But the actual amount paid to the executives every year was about one third less than the approved total.

Ghosn was reportedly authorized to decide how to allot the pay to each of the executives.

Japan’s Industry Minister says Nissan Motor needs to take a frank look at improving governance. Hiroshige Seko also said that chairman Carlos Ghosn’s arrest was very regrettable.

Seko said, “I’m deeply disappointed with what’s happening. I want Nissan to have thorough discussions on governance in the third-party panel that the board plans to set up.”

Seko says he hopes the executives understand that stronger governance will bring better product quality.

He also stressed the importance of maintaining a stable alliance between Nissan, Renault and Mitsubishi Motors.NHK

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