Thursday 19 September 2019

Ghosn in firing line again as Mitsubishi Motors board meets

Accused: Carlos Ghosn was arrested in Japan last Monday
Accused: Carlos Ghosn was arrested in Japan last Monday Business Desk Business Desk

Mitsubishi Motors’ board will meet today to remove Carlos Ghosn from his role as chairman after his arrest and ouster from alliance partner Nissan last week for alleged financial misconduct.

A removal of Ghosn by Mitsubishi's eight-member board, which meets at the automaker's Tokyo headquarters at 16:30 (07:30 GMT) would see an end to his chairmanship of Japanese automakers amid discontent over French partner Renault's role in the 19-year alliance.

Ghosn is the driving force of the alliance that Renault and Nissan sealed in 1999, when the Japanese automaker was rescued from near-bankruptcy. It was enlarged in 2016 to include Mitsubishi and enabled the members to jointly develop products and control costs.

The alliance vies with Volkswagen and Toyota for the ranking of the world's biggest automaker.

Even as Nissan has recovered and grown rapidly, it remains a junior partner in the shareholding structure. Renault owns 43pc of Nissan and the Japanese automaker holds a 15pc non-voting stake in the French firm. And Nissan is almost 60pc bigger than Renault by sales.

Top alliance executives are meeting this week in Amsterdam, aiming to shield their joint operations from the fallout of Ghosn's arrest as a power struggle between Nissan and Renault looms. Renault has refrained from firing him as chairman and CEO.

Nissan CEO Hiroto Saikawa told staff on Monday that power was too concentrated with Ghosn and that in future better communication between alliance board members and executives would help preserve independence and generate synergies among the automakers, a Nissan spokesman said.

Ghosn was pushing for a deeper tie-up, including potentially a full merger between Renault and Nissan at the French government's urging, despite strong reservations at the Japanese firm.

Nissan removed Ghosn at a high stakes board meeting on Thursday after allegations of understating his income and using company money for personal use.

Ghosn has denied the allegations, public broadcaster NHK reported on Sunday.

His firing from Mitsubishi Motors would mark the removal of the man credited with stabilising the company after it was rocked by a cheating scandal in 2016.

Nissan holds a controlling 34pc stake in Mitsubishi Motors and has two executives on the board. The other representative director is CEO Osamu Masuko, who said last week the alliance may be hard to manage without Ghosn.

While the automakers have stressed that operations and business are proceeding as normal, Nissan has postponed the launch of its high-performance Leaf electric car "to ensure that this important product unveiling could receive the coverage it merits", a Nissan spokesman said.

Shares in Mitsubishi Motors rose 3.3pc, while Nissan climbed 1.8pc, outperforming the broader market's 0.8pc gain.


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