TOKYO — Nissan Motors ended the reign of chairman Carlos Ghosn on Thursday, the board voting to remove him as chairman three days after his shock arrest for financial misconduct.
Ghosn was the architect of Nissan’s 19-year alliance with Renault and helped turn both companies around during troubled times for the industry.
Renault has not removed Ghosn as chairman and CEO despite the accusations, and the arrest has laid bare strains within the alliance.
Ghosn had been pushing for a closer tie-up, possibly even a full merger, of Nissan and Renault, partly at the urging of the French government which holds a 15 percent stake in the French automaker, but Nissan’s management had serious doubts about the idea.
Tensions within Nissan were also exposed Monday when CEO Hiroto Saikawa launched an astonishing attack on his former mentor at a dramatic news conference, lamenting “the dark side of the Ghosn era,” and the concentration of power and authority in one individual during his long “regime.”
Japan’s Industry Minister Hiroshige Seko and French Finance Minister Bruno Le Maire have already spoken by telephone and stressed their desire to maintain an alliance they called “one of the greatest symbols of Franco-Japanese industrial cooperation.”
The pair are due to meet in person in Paris on Thursday.
Nissan announced on Monday that it had conducted a months-long investigation of Ghosn after a tip-off from a whistleblower, finding that he had significantly underreported his earnings for years and spent company money for personal use. It said it had shared information with public prosecutors who had conducted their own investigation.
Ghosn and Representative Director Greg Kelly were taken into custody Monday, and Japanese media reported that prosecutors were given permission by a Tokyo court Wednesday to extend their detention for a further 10 days.
Ghosn, a Brazilian-born French citizen of Lebanese descent, is being held at Tokyo Detention House, in a spartan cell far removed from his luxurious lifestyle, the Nikkei newspaper reported.
Under Japanese law, Ghosn could face a maximum prison sentence of 10 years, and a fine of up to 10 million yen ($89,000).
The French ambassador to Japan, Laurent Pic, visited Ghosn in detention Tuesday, while Lebanon’s government has expressed its concern that he receive a fair trial.
Japanese prosecutors have said little publicly, but Japanese media have been full of anonymously sourced stories this week about Ghosn’s alleged crimes.
According to those leaks, Ghosn used Nissan’s money to secretly buy and maintain a series of luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam.
The Yomiuri newspaper also cited unnamed sources as alleging that Ghosn had instructed that the equivalent of around $100,000 a year be paid to his elder sister for a nonexistent advisory role.
Ghosn’s record in turning around both car companies is widely acknowledged, but his fat pay-packet had long been a source of controversy: it is possible Ghosn was concealing his true remuneration to avoid the ire of shareholders, including the French government, experts say.