This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Nissan chief executive officer (CEO), Carlos Ghosn, was recently arrested in Japan for alleged financial misconduct. As a result, the car company has fired the former executive.
Ghosn’s alleged financial misdeeds
Ghosn is accused of conspiring with a fellow Nissan executive, representative director, Greg Kelly, to underreport his finances. The Japanese auto company revealed in a statement that Ghosn was under investigation for months for financial misconduct.
‘The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the[Japan 225] securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn's compensation. Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets,’ said Nissan.
Downfall of a titan
Ghosn was once one of the top CEOs in the world. He took over Nissan in 1999 and is credited with saving the corporation from bankruptcy. The former chair was also head of the French carmaker Renault. The company has a 44% stake in Nissan, but that alliance will possibly be dissolved now that the executive has been arrested. Stocks in both automakers have plummeted since the news broke.
Nissan executives will meet Thursday to officially remove Ghosn and Kelly from their positions. The carmaker apologised to shareholders and vowed to cooperate with Japanese authorities after the former chair's arrest.
‘Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures,’ said the automaker.