Global automobile industry in deep crisis as Nissan Chairman Carlos Ghosn arrested over financial misconduct

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Automobile industry has been left shocked after it was reported that Nissan Chairman Carlos Ghosn had been arrested in Japan for financial misconduct. The news has adversely affected the share prices of Nissan and Renault. Renault shares hit their lowest level in more than four years on news of the scandal – down almost 15%, reported Sky News.

Ghosn was the chairman and the CEO of Nissan-Renault partnership.

According to Bloomberg, Ghosn voluntarily told the regulatory authority in Japan, admitting that he had been underreporting his own income. He’s also believed to have confessed that he manipulated financial findings in in his post as the Nissan Chairman.

These allegations are deemed a serious crime in Japan, where the authorities are preparing to arrest him formally.

The Japanese car maker said in a statement, “Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation.” The company added in its statement, “Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets.”

Ghosn, according to CNN, is one of the global auto industry’s top executives. As well as running Renault and Nissan, he is the chairman of Mitsubishi Motors.

BBC’s business correspondent Theo Leggett said, “The question is what happens now. Mr Ghosn had already begun shedding some of his responsibilities – he stepped down as chief executive of Nissan last year, and recently offloaded some day to day responsibilities at Renault as well. But he was expected to remain chief executive of Renault and to continue in overall charge of the Alliance for the next few years.

“Today’s announcements seem to undermine that strategy. It’s not clear what Renault will now do. But plans for an orderly succession – and potentially the entire future of the rather unwieldy Renault-Nissan-Mitsubishi structure – may well have been thrown wide open.”

 

 

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