Nissan’s Ghosn Arrested

Japanese prosecutors jailed Carlos Ghosn, an auto industry titan and one of the world’s best-known business executives, accusing him of underreporting his pay—and setting off a leadership crisis at the globe-spanning auto alliance he forged.

Nissan Motor Co., where Mr. Ghosn serves as chairman, said Monday that it went to the authorities with details of an internal probe that alleged he incorrectly reported his compensation in filings over many years. The Japanese auto maker also said it would seek to oust Mr. Ghosn from his position.

Almost two decades ago, Mr. Ghosn was handed the job of creating what would become an unusually deep industrial partnership between France’s Renault SA and Japan’s Nissan, which at the time was struggling financially. He later added Mitsubishi Motor Co. , also of Japan, turning three relatively small players into a colossus that now makes more cars than any other manufacturer besides Volkswagen AG. Amid recent strains between partners and a fast-changing auto industry, Mr. Ghosn was the glue keeping the alliance together.

Hereto Saikawa, Nissan’s chief executive, said he would recommend to his board, which will meet Thursday, that Mr. Ghosn be removed. “Needless to say, this is an act which cannot be tolerated by the company,” he said. Mr. Saikawa, speaking at a 90-minute news conference at Nissan headquarters in Yokohama, described Mr. Ghosn and Greg Kelly, a director who was also arrested Monday, as “masterminds” of a long-running scheme to mislead financial authorities. He offered few details, citing the prosecutors’ continuing investigation.

“I feel a big disappointment,” said Mr. Saikawa, who did not bow in deep apology before television cameras, as is customary in Japan. “And I feel frustration and despair, and indignation or resentment.” Mr. Kelly was Nissan’s first American director, appointed in 2012, but had a much lower profile than Mr. Ghosn. Neither of the men could be reached for comment.

 

Todd “Bubba” Horwitz