Japanese automaker Mitsubishi Motors, which is allied with Renault and Nissan, has fired Carlos Ghosn from his chairman position, a week after he was arrested over allegations that he under-reported his income by millions of dollars.
Prosecutors allege Ghosn under-reported his income by $44 million over five years.
As per Japanese law, a suspect can be held without charge for up to 23 days.
Last week Nissan Motor Co. sacked him as its chairman, saying an internal investigation found Ghosn abused company money and assets.
Mitsubishi has named its current CEO, Osamu Masuko, as the acting Chairman. Masuko said he was shocked about the incident, “To be honest, I was shocked and I couldn’t believe it,” he told reporters at Mitsubishi’s headquarters. “I still can’t figure out why and I just don’t understand.”
Brazil-born Ghosn, 64, saved Nissan from bankruptcy in the 1990s by spearheading its alliance with Renault. In 2016, Nissan took a 34% stake in Mitsubishi, which employs more than 30,000 people.
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.
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 share “quickly” whatever evidence it has gathered and stressed Ghosn will stay at the helm of Renault “until there are tangible charges”.
However, Le Maire also told French media on Sunday that “I do not believe in a conspiracy theory” amid the talk of a so-called “palace coup” to take more control of Nissan.
The three companies are bound together by cross-shareholdings that could be complicated to unpick. Renault has appointed an executive to take charge of Renault on a “temporary basis”.
Executives of the three companies are thought to be planning a meeting this week, their first gathering since Ghosn’s arrest.
Click here to read the official news release from Mitsubishi Motors.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.