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Nissan board sacks chairman Carlos Ghosn, says broadcaster

Renault has refrained from firing him as chairman and CEO; Mitsubishi plans to remove him as chairman

Tokyo

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 Mr Ghosn's arrest in Japan on Monday, with the 64-year-old group chairman accused of financial misconduct.

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Mr 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 Mr Ghosn and representative director Greg Kelly, who has also been arrested, conspired to understate Mr Ghosn's compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen (S$121 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 Mr 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 Mr Ghosn and Mr Kelly still in detention, neither of the men were able to vote or defend themselves at the meeting.

Renault has refrained from firing Mr Ghosn as chairman and CEO, although he remains in detention along with Mr Kelly, whom Nissan also accuses of financial misconduct.

But Mitsubishi Motors plans to remove Mr Ghosn from his post of chairman at a board meeting next week.

Amid growing uncertainty over the future of the alliance, Japan's industry minister and France's finance minister were due to meet in Paris on Thursday to seek ways to stabilise it.

"For me, the future of the alliance is the bigger deal," a senior Nissan official told reporters on Wednesday, when asked about Mr Ghosn's arrest. "It's obvious that in this age, we need to do things together. To part would be impossible."

Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Mr Ghosn engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.

Prosecutors said Mr Ghosn is being held at the Tokyo detention centre, which is known for its austere regime, a far cry from his usual luxury lifestyle, including restrictions on sleeping during the day and a requirement to wear a mask when meeting visitors to prevent the spread of disease.

The detention house "is pretty cold at this of time of the year", Internet entrepreneur and convicted fraudster Takufumi Horie told his followers on Twitter.

Motonari Otsuru, a former public prosecutor who is known for overseeing the case against Horie, was hired as Mr Ghosn's lawyer, NHK reported. Mr Otsuru's law office declined to confirm that he represented Ghosn and said no one was available for comment.

The Asahi Shimbun said on Thursday, quoting unnamed sources, that Mr Ghosn had given Mr Kelly orders by e-mail to make false statements on his remuneration.

Tokyo prosecutors likely seized the related e-mails and may use them as evidence, the report said.

The Yomiuri, Japan's biggest-circulation daily, cited unnamed sources as saying Nissan's internal investigation found that Mr Ghosn had, since 2002, instructed that about US$100,000 a year be paid to his elder sister as remuneration for a non-existent advisory role.

The paper said Nissan had found through the investigation that Mr Ghosn's sister had in fact been living in and managing a luxury apartment in Rio de Janeiro that the company had bought through an overseas subsidiary, but had done no advisory work for the car maker.

Nissan has shared the information with prosecutors, Yomiuri added.

Shares in Nissan closed up 0.8 per cent, in line with a broader market, ahead of the board meeting. REUTERS