(qlmbusinessnews.com via telegraph.co.uk – – Tue, 20th Nov 2018) London, Uk – –
Stocks in Toyko tumbled overnight with shares in Nissan and Mitsubishi plummeting after chairman Carlos Ghosn was arrested over allegations of financial misconduct.
Mitsubishi was the biggest loser on the Nikkei, closing more than 6pc down, while Nissan declined 5.5pc.
Renault shares also fell 3.3pc in Paris in early morning trade after slumping to a three-year low yesterday on the back of the news.
The arrest of the Brazilian-born Frenchman sent shockwaves through the auto industry, following claims that he manipulated financial filings and under-reported his own income by tens of millions of pounds.
Reports also suggested that Mr Ghosn had spent “huge sums” of company money on homes in Rio de Janeiro, Beirut, Paris and Amsterdam.
Nissan said the internal investigation was prompted by a whistleblower, uncovering years of financial wrongdoing.
Fujio Ando, an adviser at Chibagin Securities, told Reuters that Mr Ghosn's downfall was unlikely to lead to a sharp fall in car sales, capping the downside for Nissan shares.
“The fact that the case came to light because of a whistleblower is also positive on the whole, in terms of corporate governance,” he said. “If this had been revealed by outsiders, that would have been a different story.”
On Monday Nissan’s chief executive Hiroto Saikawa said that the company will hold a board meeting on Thursday to sack Mr Ghosn, while Mitsubishi followed suit in proposing to remove him.
Mr Ghosn chairs Nissan and Mitsubishi and is chairman and chief executive of Renault. Nissan and Renault have worked together as an alliance for almost two decades. Mitsubishi was added to the fold last year.
News of the arrest sparked concern in France, where the state owns a 15pc stake in Renault. It also raised questions about the future of the alliance.
But President Emmanuel Macron said the French government “will be extremely vigilant about the stability of the alliance” between Renault and Nissan and promised to look out for Renault workers.
Mr Saikawa also said that the arrests would not affect Nissan's relationship with Renault and Mitsubishi.
“The partnership among the three entities will not be affected by this event, rather we will closely work together with all the partners to contain any possible confusion,” he said.
It was also confirmed yesterday that Nissan’s president Greg Kelly was arrested for financial misconduct in connection with Mr Ghosn.
By LaToya Harding