November 20, 2018 – Nissan Motor Co. Chairman Carlos Ghosn was arrested last night by Tokyo prosecutors on suspicion of under-reporting his income in violation of the Financial Instruments and Exchange Act, the prosecutors said.
The prosecutors also arrested Nissan representative director Greg Kelly on suspicion of violating the same law, they said.
Investigators searched Nissan headquarters in Yokohama south of Tokyo and Ghosn’s apartment in connection with the case, they added.
Ghosn and Kelley allegedly conspired to falsely report Ghosn’s income as approximately 4.987 billion yen for a five-year period ending June 2015 to the Kanto Local Financial Bureau, while the actual amount he made was about 9.998 billion yen.
Nissan announced on Nov. 19 that its months-long investigation based on whistleblower tips has revealed that Ghosn, 64, and Kelly, 62, have committed a number of wrongdoings. The company said their illicit acts include listing Ghosn’s income as less than the actual amount in financial statements for years.
The carmaker also said Ghosn was involved in multiple, serious illicit acts including spending company funds for personal purposes.
The company said that a proposal will be made to the board of directors to dismiss Ghosn as chairman and representative director. A similar proposal will be made regarding Kelly, it added.
Nissan said it has been fully cooperating with the prosecutors’ investigation, and will continue to do so.
Nissan President Hiroto Saikawa told a late-night press conference at the company’s headquarters that he plans to propose Ghosn’s dismissal at a board meeting on Nov. 22.
“I feel a strong sense of indignation and disappointment,” Saikawa told reporters, adding that Nissan needs to stop reliance on “a single individual.” The president said the scandal would not affect the company’s daily operations or its alliance with French carmaker Renault or Japan’s Mitsubishi Motors Corp.
Earlier in the day, Ghosn was questioned on a voluntary basis by prosecutors from the special investigation section of the Tokyo District Public Prosecutors Office, people close to the investigation said.
Born in Brazil, Ghosn joined Renault in 1996 before he assumed the title of chief operating officer for Nissan in 1999. Ghosn became president of Nissan in June 2000 and chairman in April 2017.