Nissan Shares Plunge As Ghosn Faces Ouster After Arrest

Nissan and Mitsubishi shares plunged Tuesday after chairman Carlos Ghosn was arrested for alleged financial misconduct, that reportedly included exorbitantly priced houses and diverted compensation.

Tokyo, (UrduPoint / Pakistan Point News - 20th Nov, 2018 ) :Nissan and Mitsubishi shares plunged Tuesday after chairman Carlos Ghosn was arrested for alleged financial misconduct, that reportedly included exorbitantly priced houses and diverted compensation.

The two automakers have already said they will propose removing Ghosn, and Renault -- which the titan also heads -- said it would meet later in the day to discuss his fate.

The arrest of the superstar executive sent shockwaves through the auto industry and beyond, and Japanese officials scrambled to send reassuring messages about the stability of the three-firm alliance that Ghosn oversaw.

"Keeping a stable relationship (among the companies) is important," industry minister Hiroshige Seko told reporters.

"As the government, we will do anything we can," added Chief Cabinet Secretary Yoshihide Suga, without elaborating.

It was a stark indictment on the legacy of the 64-year-old, until now feted for his success in turning around failing companies with hard-nosed tactics that earned him the nickname "Le Cost Killer" in France.

In France, the government said it had found no evidence Ghosn had cheated on his taxes there, though the allegations levelled by Tokyo prosecutors did not include any claim of tax evasion.

A day after the astonishing news of Ghosn's arrest first emerged, there was vanishingly little new information about his situation and no official confirmation on his whereabouts.

However, sources confirmed he was being held at a detention centre used by Tokyo prosecutors.

Television footage showed a van reportedly belonging to the French embassy entering the compound on Tuesday.

Japanese prosecutors have said Ghosn is being held on suspicion of under-reporting his income by around five billion Yen ($44.5 million) over five years.

Nissan CEO Hiroto Saikawa said a months-long investigation prompted by a whistleblower had uncovered years of financial wrongdoing, including the under-reporting of his salary and misuse of company assets.

Public broadcaster NHK reported Nissan had provided Ghosn with houses in four countries "without any legitimate business reason," and that Nissan paid "huge sums" for the homes in Rio de Janeiro, Beirut, Paris and Amsterdam.

Representative Director Greg Kelly, who was also arrested on Tuesday with Ghosn, reportedly ordered other executives to "hide salaries", the Yomiuri Shimbun said.

It also reported that some compensation due to other executives ended up going to Ghosn, without specifying how the process had worked.

Local media reported prosecutors had negotiated a plea bargain for only the second time since Japanese law changed this year that would allow Nissan officials who are cooperating to receive lesser charges or lighter penalties.

The massive scandal prompted Nissan shares to plunge, closing down 5.45 percent in Tokyo, while Mitsubishi had fallen 6.84 percent by the end of the trading day.