One day after Nissan accused former CEO and current Chairman Carlos Ghosn of misconduct that involved alleged misuse of company funds and understating his income for years, Renault announced it would temporarily replace the embattled executive pending further investigation.
Ghosn and Kelly's status is now unknown.
"It's not an overstatement to say that Nissan's governance appraisal has completely fallen to the ground", the firm's Tokyo-based chief credit analyst, Toshiyasu Ohashi, wrote in a report this week. "At this stage, the board is unable to comment on the evidence seemingly gathered against Mr. Ghosn by Nissan and the Japanese judicial authorities", the board said in its statement.
Nissan released a statement Monday that said an internal investigation revealed that Ghosn, along American board member Greg Kelly, under-reported Ghosn's income-reportedly up to $44 million-with the Tokyo Stock Exchange.
Earlier this year, Ghosn signed a contract that would have run through 2022.
Ghosn is also chairman of Mitsubishi, and its board is set to meet in the coming days.
Renault keeps Ghosn as CEO despite arrest in Japan
"Ghosn is likely the most successful foreign chairman in Japan", said Kosuke Sato, a senior economist at the Japan Research Institute.
The merger would have rendered the Renault-Nissan alliance "irreversible". "What he did was unprecedented in Japanese corporate history".
The charismatic industry figure, who brought Nissan back from the brink of bankruptcy in the late 1990s, is also suspected of having used residences in Brazil, France, Lebanon and the Netherlands, purchased by the subsidiary and other entities, without paying rent or reporting that benefit as part of his compensation. However, would Nissan risk a crisis for itself and its Alliance partners altogether just to punish Ghosn for his alleged misdeeds?
The board appeared to pour cold water on speculation of an Alliance split, saying: "The board endorsed the support expressed by the Nissan management to the Renault-Nissan-Mitsubishi Alliance, which remains the priority of the group".
"He trampled on Japanese cultural norms with his flamboyant glory-hogging ways, and his massive compensation incited jealousies and invited retaliation", he told AFP.
His arrest has also raised alarms among Renault's French workers about what lies ahead.
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