Carlos Ghosn has been sacked as chairman of Mitsubishi Motors, a week after he was arrested in Japan following allegations that he under-reported his income by millions of dollars – a crime that carries a possible 10-year prison sentence.
Seven of the eight members of the board of Mitsubishi, part of an industry alliance created by Ghosn that also includes Renault, held an extraordinary meeting on Monday to decide his fate, days after Nissan sacked him as chair.
The news came as the chief executive of Nissan said the Japanese carmaker could seek to change the terms of the alliance with Renault.
Ghosn, who allegedly also abused company assets for personal use, remains in detention in Tokyo but has reportedly denied the allegations, according to Japanese media. He has not been charged.
In a statement, Mitsubishi said: “Ghosn has lost the confidence of Nissan” and it was “difficult for him to fulfil his duties”.
The Mitsubishi chief executive, Osamu Masuko, who will become acting chair, declined to comment on the criminal case but said he had been taken aback by Ghosn’s arrest.
“To be honest, I was shocked and I couldn’t believe it,” he told reporters at Mitsubishi’s HQ. “I still can’t figure out why and I just don’t understand.”
Ghosn, 64, a Brazilian-born Frenchman of Lebanese descent, was once lauded as a visionary after saving Nissan from bankruptcy in the 1990s by spearheading its alliance with Renault. Renault owns 43.4% of Nissan and Nissan owns 15% of Renault.
In 2016, Nissan took a 34% stake in Mitsubishi, which employs more than 30,000 people. Mitsubishi is the junior partner in the alliance, selling 1m vehicles last year compared with nearly 3.8m at Renault and 5.8m at Nissan. The group employs about 450,000 people worldwide.
Masuko insisted the alliance would survive the scandal, saying collaboration on new technologies such as driverless vehicles would help secure the companies’ futures. “We believe the alliance is needed,” he said. “Where the three companies are headed is not confrontation.”
While Nissan vowed to retain its ties to Renault, reports in Japan claimed the former’s executives were disturbed by Ghosn’s plans to turn the alliance into a full-blown merger. Nissan is almost 60% bigger than Renault by sales but remains the junior partner in the shareholding structure.
Executives from all three businesses will meet in Amsterdam later this week to discuss the fallout from Ghosn’s arrest.
The Nissan chief executive, Hiroto Saikawa, told staff on Monday its alliance with Renault was “not equal”, a week after he launched a scathing verbal attack on the “dark side of the Ghosn era” at the company.
In a 45-minute address to hundreds of staff at the company’s Yokohama HQ that was also shown live to Nissan factories and offices across Japan, Saikawa said he wanted to build a relationship with the French carmaker that better reflected “Nissan’s will”.
Prosecutors allege Ghosn under-reported his income by $44m (£34m) over five years. He denies allegations of financial misconduct, claiming he had no intention of making false reports, according to Japanese public broadcaster NHK.
Greg Kelly, a former representative director at Nissan who is suspected of masterminding the deception, also denies the allegations, saying Ghosn’s salary had been paid appropriately. Neither man has been charged.
Under Japanese law, a suspect can be held without charge for up to 23 days.
A spokesman for Nissan said its board had decided unanimously to end Ghosn’s 19-year reign as chairman last Thursday “based on the copious amount and compelling nature of the evidence of misconduct presented”.
The Mitsubishi board comprises Ghosn, Masuko, two executives each from Nissan and Mitsubishi group companies, as well as two outside appointees – an academic and a writer.
France’s economy minister, Bruno Le Maire, has urged Nissan to “quickly” share its evidence against Ghosn, saying the latter would stay on as head of Renault “until there are tangible charges”.
Le Maire added, however, that he did not believe “conspiracy theories” that Ghosn had been the victim of a “palace coup” to prevent him from merging Nissan and Renault.
He said France and Japan were keen to strengthen the companies’ alliance. “The alliance is in the interest of [the] Japanese and French, and I wish for a strengthening of the alliance that would respect existing cross-shareholding,” Le Maire told BFM TV.