Carlos Ghosn Nissan board, credited with saving the company.
Nissan Motor Co. officially removed former Chairman Carlos Ghosn from his director post on Monday at an extraordinary shareholders meeting in Tokyo, ending a 20-year relationship with the charismatic leader widely credited with saving the company.
During the meeting attended by 4,119 shareholders, the Yokohama-based automaker also ousted Greg Kelly, a close aide of Ghosn and former representative director, from the board, while Renault SA Chairman Jean-Dominique Senard was appointed as a director to replace Ghosn.
Nissan ousted Ghosn from the chairman post soon after his initial arrest on allegations of financial misconduct, but a vote by shareholders was needed to remove him from the board.
Standing before the shareholders, Nissan CEO Hiroto Saikawa apologized for causing trouble over Ghosn’s case, which he described as “an unheard of incident” in the history of the automaker.
But asked about his own responsibility, Saikawa said he will not resign.
“I believe the current management also has serious social and moral responsibility,” a male shareholder said during the meeting, adding that the case has damaged Nissan’s reputation and negatively impacted society.
“If you talk about moral responsibility, I’d like to propose that we renew our management by having all of the current management members step down,” he said.
While admitting he has a grave responsibility, Saikawa said he plans to fulfill it through implementing measures to improve governance and solidify the three-way alliance with Renault and Mitsubishi Motors Corp.
“Once I’ve done these things thoroughly and the situation has moved to the point where we can pass the torch … I’ll think about what to do with myself,” Saikawa said.
In November, Ghosn was arrested on suspicion of underreporting his income for years along with Kelly. Tokyo prosecutors served Ghosn with two more warrants in December. Although he was released on bail after 108 days of detention, Ghosn was re-arresed last week for allegedly redirecting Nissan funds to his investment firm through a company based in Oman.
Ghosn and Kelly have denied the allegations.
Nissan also claims that Ghosn used the company’s assets for his personal benefit, including purchasing a house and covering his family’s expenses.
But some shareholders questioned why the current executives failed for so long to stop the alleged financial misconduct by Ghosn and Kelly, with some allegedly dubious payments going as far back as 2003.
“It’s true that very few people were dealing with money in their limited circle. They managed to distance their activity from being a target of audit or investigation,” Saikawa said.
“I was there back then, but as I look back, it was difficult to identify some specific (signs),” he said.
Toshiyuki Shiga, a Nissan director and former chief operating officer, said he was “aghast at hearing the news of Ghosn’s arrest.” Shiga said he was probably the first Nissan representative to meet Ghosn and worked with him for the longest period.
“It took me a while to digest the facts. I couldn’t believe he was really doing such things,” said Shiga, who held the COO post between 2005 and 2013 under Ghosn.
Yet as he learned about the internal investigation, he had no choice but to accept it, he said.
“At the same time, I’ve come to think that I am responsible for not being able to stop him,” Shiga said.
Some shareholders also asked whether Nissan will be filing a damages suit against Ghosn and how the firm would respond if he decided to sue the company if he is cleared of wrongdoing. Saikawa said the company plans to file a damages suit against Ghosn when the timing is right, adding that Nissan is confident in its case if Ghosn decides to sue.
Last month, a panel of experts commissioned by Nissan to investigate the company’s governance issues said the problem was mainly a “concentration of all authority” in Ghosn.
It made a series of proposals, including abolishing the chairman position and changing the company’s basic framework to set up committees with a majority of outside independent directors tasked with nominations to the board, compensation issues and corporate auditing by the end of June.