Ghosn gone: Nissan drives out chairman after arrest
Tokyo, Nov 22: Nissan board members voted unanimously to sack Carlos Ghosn as chairman on Thursday, a spectacular fall from grace for the once-revered boss whose arrest for financial misconduct stunned the car industry and the business world.
Ghosn stands accused of under-reporting his income by millions of dollars and a host of other financial irregularities, alleged after a months-long internal Nissan probe following a whistleblower report.
His ouster as chairman represents an astonishing turnaround for the titan of the auto sector who revived the Japanese brand and forged an alliance with Renault and Mitsubishi Motors, which sold a combined 10.6 million cars last year more than any other firm.
It also throws the future of the alliance into doubt, as Ghosn was the architect of the fractious tie-up -- which employs 450,000 people globally -- and the glue holding it together.
"After reviewing a detailed report of the internal investigation, the board voted unanimously ... to discharge Carlos Ghosn as Chairman of the Board," the statement said.
Nissan also stressed its "long-standing... partnership with Renault remains unchanged" and that "the mission is to minimise the potential impact and confusion on the day-to-day cooperation" between the firms.
Prosecutors intercepted the Brazil-born tycoon Monday as he landed in Tokyo on a private jet, accusing him and another executive Greg Kelly of understating the chairman's income by around 44 million between June 2011 and June 2015.
His fate as Nissan chairman appeared sealed just hours later as his hand-picked successor as CEO, Hiroto Saikawa launched an impassioned broadside at his former mentor, muttering about a "dark side" to the Ghosn era and urging his sacking.
Even after being jettisoned as chairman, Ghosn remains technically a member of the board as a full shareholders' meeting is required to remove him.
Nissan said it would study the creation of a "special committee" to take advice from a third party on improving its internal governance and executive pay.
Ghosn is being held custody in a Tokyo detention centre and has not been seen in public nor made any comments since his arrest.
He received a visit from Brazilian consul Joao de Mendonca on Thursday who told AFP that Ghosn "sounded very well, in good health".
However, his conditions are likely to be a far cry from what the millionaire businessman is used to. Inmates at the centre are typically allowed 30 minutes exercise per day and only two baths a week.
Ties and strings are removed to prevent suicide attempts and former guards and lawyers said Ghosn was almost certain to be held in a cramped cell on his own.
On Wednesday, prosecutors successfully applied to extend his custody for an additional 10 days as they step up their questioning.
Deputy chief prosecutor Shin Kukimoto said that the type of crime Ghosn is accused of is "one of the most serious types of crime" under Japan's Financial Instruments Act and Ghosn could face a 10-million-yen fine and/or a 10-year prison sentence.
Under the law, companies themselves can also be held accountable for the falsified documents, Kukimoto said, following reports that prosecutors believe Nissan also has a case to answer.
Public broadcaster NHK said Nissan had paid "huge sums" to provide Ghosn with luxury homes in Rio de Janeiro, Beirute, Paris and Amsterdam "without any legitimate business reason".
Ghosn had a reputation as a hard-nosed workaholic with no qualms about closing factories and slashing jobs -- earning the nickname "Le Cost Killer" in France, where 47,000 employees work for Renault.
But his exorbitant salary and flashy lifestyle at odds with Japanese corporate culture drew fire.
According to the Financial Times, Ghosn's fall from grace came as he was working on a full-blown merger of Nissan and Renault.
This was opposed by executives in the Japanese firm that has ended up being the most profitable player in the partnership and the FT said Ghosn's departure could be used as a pretext to rebalance the alliance in Nissan's favour.
Renault has held off jettisoning Ghosn, pointedly saying Nissan had failed to share the evidence it had gathered with its sister company.
Governments in Paris and Tokyo have been scrambling to contain the fallout from the arrest, with President Emmanuel Macron saying France would be "extremely vigilant" about the stability of Renault and the alliance.
Analysts said that despite clear tensions between the two firms headquartered 10,000 kilometres apart, neither company has the financial might alone to make the heavy investments in electric vehicles considered to be the industry's future.
"It would be like a couple divorcing after 20 years it would be complicated, very expensive and not easy to do," said Gaetan Toulemonde, an analyst at Deutsche Bank.
"Honestly, I don't know if it's even possible."
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UK PM Keir Starmer takes ‘China matters’ message on first Beijing visit
London (PTI): “Like it or not, China matters to the UK,” is the message British Prime Minister Keir Starmer is taking on his visit to Beijing on Wednesday, accompanied by a 60-strong business and cultural delegation.
Downing Street said the visit, which will also cover Shanghai, reflects the UK’s “clear-eyed and realistic” approach to China in terms of opportunities and challenges they pose by continuing to pursue cooperation while “maintaining guardrails” when it comes to the country’s national security.
The Labour Party government is keen to highlight its re-engagement with China with this first visit in eight years, coming close on the heels of a ministerial go-ahead for its controversial new “mega embassy” in London.
“For years, our approach to China has been dogged by inconsistency – blowing hot and cold, from Golden Age to Ice Age. But like it or not, China matters for the UK,” Starmer said in a pre-visit statement.
“As one of the world’s biggest economic players, a strategic and consistent relationship with them is firmly in our national interest. That does not mean turning a blind eye to the challenges they pose – but engaging even where we disagree.
“This is what our allies do, and what I will do: delivering for the public, putting more money in their pockets and keeping them safe through pragmatic, consistent cooperation abroad,” he said.
The UK PM is set to meet President Xi Jinping and Premier Li Qiang in Beijing on Thursday for talks on trade, investment and national security, before travelling to Shanghai for a range of engagements with British and Chinese businesses.
Accompanied by a delegation of leading UK-based businesses, including Tata Motors owned Jaguar Land Rover, sporting institutions, museums and theatre groups, Starmer is expected to push for access in areas such as the financial services sector, creative industries and life sciences.
“However, he will be clear that we will not trade economic cooperation for our national security. He will raise the areas where we disagree with China – being clear that we will always defend our national security and where viewpoints differ, frank and open dialogue is of vital importance,” Downing Street said.
Describing China as the world’s second largest economy, a crucial player in global supply chains and a growing military power, the UK said it is important to engage with its third-largest trading partner which supports 3,70,000 British jobs.
“We want to see trade flourish between us. From financial services to advanced manufacturing and the global energy transition, the UK’s strengths increasingly align with the rapidly evolving Chinese economy,” said Peter Kyle, the Business and Trade Secretary travelling with Starmer.
“The first duty of government is security, and we protect ourselves best through active engagement and pragmatic cooperation, not by shutting the door,” he said.
The visit follows the 2025 Economic and Financial Dialogue (EFD) that the UK’s Department for Business and Trade (DBT) claimed secured 600 million pounds in immediate benefits and the first UK-China Joint Economic and Trade Commission (JETCO) since 2018.
“The UK’s world-leading financial services sector is a cornerstone of our economy. With deep and liquid markets, and the FTSE hitting all-time highs, there are real opportunities for mutually beneficial cooperation with China which supports jobs for working people and growth for businesses across Britain,” said Lucy Rigby, Economic Secretary to the Treasury, also part of the ministerial delegation.
The Opposition Conservatives have criticised Starmer’s approach to China, amid human rights concerns and espionage fears. “Starmer has already surrendered to the Chinese Communist Party over their plan for a spy-hub super embassy in the heart of our capital,” said shadow foreign secretary Priti Patel.
“The evidence is overwhelming that China poses a serious threat to our national security and it is clear Starmer is going to China without any leverage. He lacks the backbone to stand up for Britain and is bending over backwards to appease Beijing,” she said.
Following his trip to China, Starmer is set to travel to Tokyo to meet with Japanese Prime Minister Sanae Takaichi to reinforce the UK-Japan partnership, said to be worth over 100 billion pounds and supporting 2,00,000 UK jobs.
