And finally, here’s our news story on Carlos Ghosn’s dismissal:
While the Nissan board meeting took place, Carlos Ghosn remained confined in a solitary cell, in a detention centre in Tokyo.
Conditions are austere - just 30 minutes of daily exercise and two baths a week. Quite a shock for a millionaire who celebrated his second marriage with a glittering party at Versailles.
While it is impossible to know Ghosn’s exact surroundings, lawyers who have made several visits there to clients as well as former detainees paint a picture of an austere facility where solitude is the biggest enemy.
Veteran attorney Yoshiro Ito said the barren rooms have nothing but a bed, toilet, and a handle-less door with an iron-barred window.
Detainees follow a strict routine. Wake-up call is shortly before 7am and lights out at 9pm.
Breakfast, lunch and dinner are provided. For an extra charge, inmates can order additional food from pre-approved options.
The Japan Times have more details of the allegations against Carlos Ghosn, including that he instructed board representative Greg Kelly (also dismissed today) to under-report his true salary:
The speed of Carlos Ghosn’s fall from grace is quite astonishing.
So much, in fact, that there’s speculation that he’s been deliberately bundled out by Nissan, perhaps to thwart plans for a formal merger with Renault.
Christian Stadler, Professor of Strategic Management at Warwick Business School, explains:
“The intriguing twist in this story is the speculation whether this was a deliberate move by Japanese executives to get Ghosn out of the picture.
“I think it is unlikely they did not know about Ghosn’s financial arrangements.
“However, it is possible that story this came to light because new rules for whistle-blowers in Japan made it easier for someone to come forward.
Keiko Ihara could be the new broom that Nissan needs....
Nissan is also setting up an advisory committee to find potential successors to Ghosn.
It will be consist of three board members, including Keiko Ihara, a leading female Japanese racing driver -- but not Hiroto Saikawa, the CEO who has been suggested as a possible new chairman.
Nissan has decided to consider creating a “special committee” to examine its corporate governance. This would include developing “better governance of director compensation”.
Today’s decisions, including to dismiss chairman Carlos Ghosn, were unanimous, Nissan says.
The company adds that:
At the beginning of the session, the board acknowledged the significance of the matter and confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimize the potential impact and confusion on the day-to-day cooperation among the Alliance partners.
Nissan: Ghosn has been removed from the chairmanship
It’s official: Carlos Ghosn has been removed as Nissan’s chairman, following the discovery of alleged financial misconduct which led to his arrest this week.
Here’s the statement from Nissan, which largely echoes what the company said on Monday.
Announcement regarding Changes of Representative Directors
On November 22, 2018 the Company resolved to remove representative rights and position of Chairman of its directors as follows:
1. Reasons for Removals With respect to Carlos Ghosn, an internal investigation has uncovered the following misconducts directed by him:
- (i) the misconduct of recording compensation amounts in the annual securities report that were less than actual, in order to reduce the amount of his compensation to be disclosed, over many years;
- (ii) the misconduct of expending our company’s investment capital for his personal use, under false pretenses;
- (iii) other misconduct, such as expending our company’s expenses for personal use.
With respect to Greg Kelly, as a result of an internal investigation he has been determined to be the mastermind of this matter, together with Carlos Ghosn.
The Company will further investigate this matter and consider measures to enhance the Company’s governance.
Here’s Reuters’ latest take on Carlos Ghosn’s dismissal:
Nissan’s board ousted chairman Carlos Ghosn on Thursday after the shock arrest of the industry heavyweight, Japanese broadcaster NHK reported without citing sources, ushering in a period of uncertainty for its 19-year alliance with Renault.
A Nissan Motor Co spokesman declined to comment.
The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors, has been rattled to its core by Ghosn’s arrest in Japan on Monday, with the 64-year-old group chairman accused of financial misconduct.
Ghosn had shaped the alliance and was pushing for a deeper tie-up, including potentially a full Renault-Nissan merger at the French government’s urging, despite strong reservations at the Japanese firm.
Japanese prosecutors said Ghosn and Representative Director Greg Kelly, who has also been arrested, conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen ($88 million).
Shin Kukimoto, deputy public prosecutor at the Tokyo District Public Prosecutors Office, said on Thursday that court approval was received a day earlier to detain Ghosn for 10 days but he could not comment on whether he had admitted to the allegations.
Nissan executives have five seats on the nine-member board, Renault loyalists have two seats and the remaining two are held by unaffiliated outside directors, a former bureaucrat and a race driver.
With Ghosn and Kelly still in detention, neither of the men were able to vote or defend themselves at the meeting.
Nissan has also voted to dismiss representative director Greg Kelly, according to the Nikkei newspaper.
Kelly, a lawyer by training, was a close ally of Carlos Ghosn and the first American to sit on the Japanese carmaker’s board of directors.
On Monday, Nissan CEO Hiroto Saikawa labelled Kelly the “mastermind” behind Ghosn’s alleged misuse of Nissan funds.
Now this is interesting... Reuters is reporting that Renault had urged Nissan NOT to dismiss Carlos Ghosn today, before the meeting began.
Ghosn is also Renault’s CEO and chairman, on top of his duties at Nissan.
Renault had two seats on Nissan’s nine-strong board (although there were only seven representatives today, as Ghosn and Greg Kelly were both arrested on Monday)
NHK: Nissan has dismissed Ghosn as chairman
Japanese broadcaster NHK is reporting that the Nissan board has voted to remove Carlos Ghosn as their chairman at today’s meeting.
Either way, there should be a statement soon....
Reuters is reporting that “multiple Nissan board members” have been spotted leaving the company’s HQ, suggesting the meeting may finally be over...
Crowds of reporters have gathered in front of Nissan’s global headquarters in Yokohama, desperate to hear news from today’s board meeting:
Elsewhere, Ghosn’s face beams down from large electronic screens as the public keep up with events:
Pound rallies as EU-UK agree draft political declaration
The pound has jumped to its highest level since Dominic Raab resigned as Brexit secretary a week ago.
Sterling has gained 1.5 cents against the US dollar to $1.292, clawing back most of last week’s losses.
The trigger: Britain and the EU have agreed a new, longer, text outlining the political declaration on the framework for the future relationship after Brexit.
Our Politics Live blog has full details:
It’s important to remember that Carlos Ghosn hasn’t been charged yet, let alone convicted.
But Tokyo prosecutors have already suggested that he could face a 10-year stretch, if convicted of breaching Japanese financial law.
There’s an increasingly negative mood in the financial markets today.
All the European stock indices are in the red, down around 1%, wiping out Wednesday’s gains (which followed heavy losses on Tuesday).
Russ Mould, investment director at AJ Bell, says:
Hopes have been dashed that yesterday’s rally would be the start of a new recovery. The FTSE 100 was down 0.6% to 7,010 on Thursday morning amid notable weakness in utilities, telecoms and bank stocks. It is a similar story across Europe with Germany’s DAX index down 0.4%, France’s Cac 40 index down 0.5% and Spain’s IBEX 35 index falling 0.7%.
UK energy provider Centrica is one of the top fallers, down 8%, after reporting that it lost 372,000 home energy customers in the last four months. Added to the cost of the UK energy price cap, and investors are fretting that the company could cut its dividend.
The lights are blaring at Nissan’s HQ, as the board continue deliberate on whether to dismiss Carlos Ghosn.
We’re expecting an announcement from the company later, and a statement to the Japanese stock exchange.
Japan’s industry minister and France’s finance minister are due to meet in Paris on Thursday to seek ways to stabilise the Nissan-Renault alliance, Reuters reports.
“For me, the future of the alliance is the bigger deal,” said a Nissan official, when asked about Ghosn’s arrest.
“It’s obvious that in this age, we need to do things together. To part would be impossible.”
Investors are still digesting Ghosn’s fall, and its impact on the car industry.
Shares in Nissan (which plunged 6% after his arrest), gained 0.8% today. But shares in Renault have dipped by 1.2% in early trading in Paris.
Japanese broadcaster NHK are reporting that Ghosn is accused of instructing an aide to make a $1.5m payment for his home in Lebanon to be refurbished:
Informed sources say Ghosn allegedly sent an email telling an executive, who is a close aide, to arrange a payment for the Lebanon house.
Sources say about $9m was spent to purchase it and about $6m went for renovations.
That house is one of the four which Nissan allegedly funded, at a cost of $17.8m.
Carlos Ghosn has reportedly hired a former Tokyo prosecutor to defend him.
Bloomberg has more details:
Motonari Otsuru oversaw high-profile probes against Livedoor founder Takafumi Horie and Kanebo during his tenure as a prosecutor.
Ghosn will need a hot-shot lawyer; Tokyo prosecutors are now saying that his alleged actions would constitute a “heavy crime,’’ more serious than insider trading.
Shin Kukimoto, deputy public prosecutor at the Tokyo District Public Prosecutors Office, is discussing Carlos Ghosn’s arrest right now.
Kukimoto told reporters that Ghosn is being held at the Tokyo Detention Centre and that the Tokyo District Court on Wednesday.
Kukimoto also confirmed that the Tokyo District Court decided yesterday to extend Ghohn’s detention for another 10 days.
But, prosecutors won’t say whether Ghosn has admitted any of the charges
Carlos Ghosn: What the papers say
Japan is gripped by the fall from grace of one of their most successful and popular (until this week anyway) bosses.
The Japan Times noted that Nissan’s Hiroto Saikawa had blamed Ghosn’s alleged wrongdoing on a regime “in which all power at Nissan was concentrated in the hands of Ghosn for an extended period.”
The newspaper added:
“If that is the case, it is Nissan itself that allowed such opaque ways of management at the company for nearly 20 years, and the automaker will not escape blame for its poor governance, which could result in damaging the interests of its stakeholders.”
The Yomiuri Shimbun said Nissan’s prospects “have become ever more unclear” as a result of Ghosn arrest. “Nissan must strive to improve its organisation through such means as repairing its corporate governance, so it can hasten to restore trust,” it said.
The Asahi Shimbun described this week’s events as “stunning” and urged Nissan to fully disclose the results of its internal investigation into Ghosn and Greg Kelly.
“The company is in danger of falling into dysfunction unless it does its best to disclose whatever it can to its shareholders and comes up with measures to deal with the current crisis.”
The Mainichi Shimbun said the allegations against Ghosn, if proved true, amounted to “a serious act of betrayal” and “the distorted product of a long-term dictatorship”. It added:
“The carmaker must undergo a fundamental review of its management in a bid to win back the trust of shareholders and the market.”
Carlos Ghosn’s fate will be decided by seven Nissan board members, on a simple majority vote.
And following CEO Hiroto Saikawa’s savage denunciation on Monday, it would be a major shock if the board didn’t dismiss their chairman today.
The agenda: Nissan meeting to oust Ghosn today
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The eyes of the auto industry are focused on Japan today, as the board of Nissan meets to decide whether to dismiss chairman and CEO Carlos Ghosn.
The Japanese carmaker was plunged into crisis this week when Ghosn was arrested, follow an internal inquiry into alleged “serious misconduct” by the man who had led the company for almost 20 years.
Ghosn is accused of misreporting his salary and misusing company assets -- including using huge luxury homes in Rio de Janeiro, Paris, Amsterdam and Beirut bought using company funds.
Senior executive Greg Kelly, who was also arrested this week, could be fired today too; Nissan claim he was one of the ‘masterminds’ behind Ghosn’s alleged misdeeds.
The meeting was due to start a few minutes ago, so we should have a result soon.
Nissan’s CEO, Hiroto Saikawa, has already savaged Ghosn’s legacy. On Monday he told reporters he felt “indignation and resentment” over his mentor’s conduct.
And rather than hail Ghosn’s achievements, Saikawa argued that his long tenure appeared to have had a “negative impact” on day-to-day operations.
As AFP put it:
Ghosn’s fate appears all but sealed after his hand-picked replacement as CEO, Hiroto Saikawa, launched an astonishing broadside at his mentor following his arrest Monday at a Tokyo airport as he landed in his private jet.
Saikawa said “too much authority” had been placed in the chairman’s hands and lamented the “dark side of the Ghosn era”, as he called the board meeting to fire him.
Executives at Renault (which Ghosn also chairs) will be dialling into the Nissan board meeting. Ghosn’s fate could affect thousands of workers at the Renault-Nissan-Mitsubishi alliance which he created.
Otherwise, it’s a quiet day in the markets, with America closed for Thanksgiving. Italy’s budget row, and the Brexit talks, will also feed into the chatter on the trading floors.
- 7am GMT: Nissan extraordinary board meeting
- 12.30pm GMT: European Central Bank releases minutes of its October meeting