Nissan to sack chairman Carlos Ghosn over 'serious misconduct' - as it happened
The Nissan-Renault alliance is in crisis after one of the world's most powerful auto bosses is accused of under-reporting his salary over many years
- Latest: Nissan to sack Ghosn later this week
- CEO says chairman under-reported his salary and misused Nissan assets
- Nissan apologises, and proposes sacking Ghosn
- Renault shares have slumped
Earlier:
7.03pm GMT
And finally, here's our latest take:
Carlos Ghosn, the chairman of Nissan and one of the world's most powerful automotive executives, has been arrested by Japanese prosecutors in a move that sent shockwaves through the industry.
The 64-year-old French-Brazilian is suspected of having understated his income on financial statements and was exposed by a whistleblower. Nissan said it will fire him this week as the company admitted it had left him in control for too long.
Related: Nissan boss Carlos Ghosn's arrest in Japan shocks auto industry
6.53pm GMT
Here's more reaction to the Ghosn story:
#Ghosn's arrest in Tokyo on "misconduct" allegations an extraordinary end to a storied career. "Ghosn shock" all the greater in #Japan given his role in saving near bankrupt Nissan from 1999. Raises questions over future of Renault-Nissan-Mitsubishi alliance. #aaf1/4af^3a1/4ee(R)ae
#CarlosGhosn is unsurprising example of corporate greed, says Arthur Wheaton @cornellilr @workerinstitute #Nissan, full comments here: https://t.co/VhW8w3NdHk
ET TU BRUTE? The toppling of Carlos Ghosn at @Nissan Looks a Lot Like a Palace Coup. 'The downfall of kings is bloody & swift' @davidfickling https://t.co/3D08svaEYr @bopinion
4.48pm GMT
Renault's shares never really recovered from the shock of Carlos Ghosn's arrest and imminent dismissal from Nissan.
After a wild day's trading, they have closed down over 8% at a59.06, as traders worry that the Nissan-Renault alliance could be in jeopardy.
3.28pm GMT
Tim Hubbard, assistant professor of management in the University of Notre Dame's Mendoza College of Business, argues Nissan has learned the perils of giving one executive too much power:
"Carlos Ghosn's arrest and, soon to be, dismissal over financial misconduct is yet another-all too frequent-example of a top executive being dismissed for misconduct in the executive suite.
Ghosn was one of the car industry's most prominent executives who has been responsible for breathing life back into Nissan. Ghosn's arrest complicates a highly interconnected set of relationships between Nissan, Renault and Mitsubishi Motors. The equity stakes that they have between each other may be at risk. This has widespread implications for a large portion of the auto industry as these alliances have become more critical in the increasingly interconnected design, manufacturing, and support of auto customers worldwide.
3.18pm GMT
My colleague Jasper Jolly has written a neat profile of Nissan's Ghosn, and his sudden fall from grace.
Here's a flavour:
Carlos Ghosn was, until Monday, a titan of the global car industry. The first person to lead two Fortune 500 companies at the same time, he also enjoyed an almost unique position as a foreign chief executive of a major Japanese company - even gaining the honour of a manga comic book version of his life and rice sculptures of his face in bento lunchboxes sold to Japanese businessmen.
Yet in a remarkable development which has shocked the automotive industry, Ghosn will now be dismissed by Nissan on Thursday after alleged financial irregularities. Nissan did not hold back in its statement on Ghosn, accusing him and a senior colleague of "significant acts of misconduct" including understating his pay to regulators and misusing company assets. Renault and Mitsubishi Motors, both of which Ghosn also chairs, have yet to respond.
Carlos Ghosn: Nissan scandal slams brakes on cost killer's career https://t.co/S9legiVHR7
3.05pm GMT
Update: Nissan President and CEO Hiroto Saikawa did give the media a bow as he exited today's press conference, as these photos show:
2.49pm GMT
The FT's Peter Campbell watched Nissan's press conference, and was stuck by the way that Nissan CEO Hiroto Saikawa deeply criticised chairman Carlos Ghosn:
Saikawa says he finds it hard to find words to express how he feels. "Despair, indignation, resentment".
Adds: "I will identify all the issues and take necessary countermeasures."
Saikawa: "This is the negative aspect of the long regime of Mr Ghosn. This is a fact that we need to admit."
Saikawa says current Alliance structure "concentrates power on one individual, this is not the only cause but it is one of the factors or drivers".
"Because one individual was powerful for years, this has a big significant impact."
Conference ended.
In total, an extraordinary, extraordinary, performance by Saikawa with the seeming intention of putting clear water between Nissan and Ghosn.
2.42pm GMT
Nissan's dramatic press conference in Tokyo ended with another apology from Saikawa, this time for not being able to answer many of the media's questions.
However, I don't believe he gave the traditional bow of contrition, which we've seen in previous Japanese corporate scandals.
Very unusual Nissan press conference is over: CEO Saikawa - speaking alone with no bow of apology - spoke frankly of what he saw as an over-concentration of power in the hands of Ghosn
IN a 90 minute press conference at Nissan headquarters, Hiroto Saikawa, CEO of Nissan, did not bow in apology. In Japan, that's rare
2.25pm GMT
Over in France, a union official has welcome the news that Ghosn is in hot water over his pay and alleged misuse of Nissan assets.
Associated Press have the details:
Ali Kaya, who heads the CGT union at a Renault factory in Flins outside Paris, said "the most shocking thing is that these people were not arrested well before this."
He lamented that the public has grown inured to "astronomical sums" paid to Ghosn and other executives. The powerful, hard-left CGT has long campaigned to cap executive pay.
2.04pm GMT
Nissan CEO Saikawa is still being quizzed by Japanese reporters, desperate for more details about Carlos Ghosn's impending sacking.
He says that Nissan's internal investigation into the misconduct is almost complete, but won't comment on whether any other people are involved.
1.59pm GMT
1.54pm GMT
Saikawa is really putting the boot into Carlos Ghosn now, claiming that the chairman's long reign had a "negative impact" on business operations
He does concede, though, that Ghosn had implemented valuable reforms and restructuring in his early days at Nissan.
1.47pm GMT
Some instant reaction to the Nissan press conference:
Crisis Comms 101 at Nissan press conference. No company logo visible. https://t.co/oTQVNCWi1R pic.twitter.com/4u3KrwM30h
Nissan says corporate and investment funds misused by Ghosn
Reporter calls news of misconduct investigation of Ghosn a coup d'etat
#Nissan CEO says concentration of power of Ghosn led to this misconduct, this is not a coup d'etat by "other forces"
This Nissan press conference is absolutely extraordinary.
1.47pm GMT
The Nissan press conference is getting increasingly tense.
One reporter tells CEO Saikawa that people who love Nissan cars will be shocked by today's news.
1.42pm GMT
Saikawa says he can't comment on whether chairman Carlos Ghosn and board member Greg Kelly will face criminal charges.
1.38pm GMT
Journalists in Toyko are demanding more details about Carlos Ghosn's serious misconduct.
Nissan CEO Saikawa, though, is refusing to give much away.
1.32pm GMT
Nissan are now questions from the media in Tokyo:
Q: Is it correct that Carlos Ghosn was arrested when he arrived at an airport in Japan today?
1.29pm GMT
Carlos Ghosn's "serious misconduct" fell into three parts, according to Nissan:
1.25pm GMT
Hiroto Saikawa, CEO of Nissan about Carlos Ghosn bombshell: "I feel a big disappointment, frustration, despair, indignation and resentment" pic.twitter.com/FhvsNphD9G
1.24pm GMT
Nissan CEO Hiroto Saikawa says too much power was concentrated in one executive (as explained earlier, Carlos Ghosn has been the driving force at both Nissan and Renault for almost 20 years)
He pledges that efforts will be made to prevent the Ghosn scandal hurting the Renault-Nissan alliance (easier said than done, I fear)
1.17pm GMT
An emotional-sounding Hiroto Saikawa adde that he is "disappointed and frustrated" by the actions of Chairman Ghosn and Representative Director Kelly.
On behalf of the company, we offer a deep apology to shareholders, Nissan's CEO says.
1.13pm GMT
Nissan are holding a press conference in Toyko now.
12.49pm GMT
12.44pm GMT
French president Emmanuel Macron has now weighed in, saying the state will be "extremely vigilant" about the stability of Renault, and its alliance with Nissan.
During a trip to Brussels, Macron told reporters that:
"It's too early to comment on the reality or materiality of the accusations, about which I have no further information.
"As a shareholder, however, the French government will remain extremely vigilant regarding the stability of the alliance, the group and ... its employees, who have the full support of the state."
Arrestation Carlos Ghosn : "Il est trop tit pour se prononcer (...) l'Etat en tant qu'actionnaire sera extrimement vigilent i la stabiliti(C) de l'alliance et au groupe" ri(C)agit Emmanuel Macron lors d'une confi(C)rence de presse en Belgique pic.twitter.com/enFKYUkPVU
12.12pm GMT
Ana Nicholls, analyst at the Economist Intelligence Unit, says Carlos Ghosn's shock ousting puts the entire future of the Nissan-Renault alliance under question.
The strong bond between the French and Japanese carmakers depends partly on cross-shareholdings but even more on Ghosn's huge personal influence. He built his reputation as the man who turned around first Renault and then Nissan. This helped to maintain the trust between the two companies as their fortunes wax and wane, usually in a way that balanced each other out. His keen eye for cost-cutting underpinned the alliance's success in combining supplier networks, vehicle development and other central tasks in order to generate synergies. Ghosn also made it his personal mission to bring AvtoVAZ and Mitsubishi into the alliance, and had made (some) progress in turning them around too.
"In an interview with The Economist Intelligence Unit in mid-November, Mr Ghosn seemed confident that this combination of diversity and synergy could survive his departure - that it wasn't just based on what he called "the human factor". Even so, his successor will face questions about whether to invest money in increasing the company's cross-shareholdings in order to cement the relationships, or risk the alliance falling apart. He or she may also be under pressure to show how the alliance can stop Tesla and GM from eroding its early lead in electric vehicles - and how the somewhat sporadic recent investment in mobility and connected car technology can be harnessed to help the alliance as a whole."
12.08pm GMT
Economics professor Thomas Piketty (an expert in inequality) has tweeted that Ghosn's alleged misconduct shows the perils of granting top bosses pay "without limits"....
Voici i quoi conduit l'idi(C)ologie des premiers de cordi(C)e et des ri(C)muni(C)rations sans limite... Et si le gouvernement se souciait enfin de justice fiscale, en revenant sur ses mesures ISF/flat tax?
https://t.co/gGBMoEMu2s
11.56am GMT
There's massive media interest in Japan over the crisis gripping Nissan tonight.
Journalists have gathered outside the Tokyo Regional Prosecution Office in Tokyo, awaiting fresh details on the investigation into Carlos Ghosn .
11.49am GMT
Rumours of Carlos Ghosn's alleged 'serious misconduct' are flying around Japan.
The Kyodo newswire is reporting that Ghosn is suspected of understating income by 5 billion yen over five years -- that's almost 35m.
11.10am GMT
Renault's shares are continuing to be pummelled; now down 14%.
The news that Carlos Ghosn has ben arrested on suspicion of violating financial trading has "rocked investor confidence in the Paris-listed stock", says David Maddon of CMC Markets.
11.05am GMT
The news that Carlos Ghosn is being ousted from Nissan is causing massive shockwaves in the car industry.
Ghosn seems to be built for the job: He has the ability to connect with strangers instantly and to compartmentalize, no discernible private life outside his family, and a willingness to travel 300,000 miles a year (that's 11 circumnavigations).
The question is, Who will run this leviathan, which he calls the Renault-Nissan Alliance, after the 60-year-old retires, or if, God forbid, something happens to him?
It is a measure of the extraordinary rise of Mr Ghosn in Japan that he should be deemed worthy enough to eat. The Japanese take their food seriously and do not welcome foreign intrusions. As such, the "Ghosn bento" could be seen as a Japanese way of bestowing acceptance upon him.
10.41am GMT
Japanese newspaper Yomiuri is now reporting that Carlos Ghosn has been arrested by prosecutors in Tokyo. That's not been confirmed yet (obviously it's a fast-moving story...)
Nissan Ghosn: Has Been Arrested - Yomiuri
Nissan Chairman Carlos Ghosn has now been arrested, according to one report in Japan https://t.co/WSRCJ4ebxV
10.18am GMT
Nissan has now issued a statement, accusing chairman Carlos Ghosn and 'representative' Greg Kelly of 'serious misconduct'.
Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company's Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly.
The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn's compensation.
10.02am GMT
Blimey: Renault's shares have now plunged by over 10%.
Traders in France are understandably shocked by the news that chairman Ghosn faces arrest in Japan for allegedly under-reporting his income.
9.48am GMT
Newsflash: We're getting more details from Japan about the shock investigation into Nissan/Renault chairman Carlos Ghosn.
According to Japanese press agency Jiji:
NISSAN SAYS GHOSN USED COMPANY MONEY FOR PERSONAL USE AND COMMITTED SEVERAL OTHER SERIOUS ACTS - JIJI
NISSAN SAYS ITS BOARD TO PROPOSE THAT GHOSN BE TERMINATED FROM CHAIRMAN POST SWIFTLY - JIJI
What a snap: NISSAN SAYS ITS BOARD TO PROPOSE THAT GHOSN BE TERMINATED FROM CHAIRMAN POST SWIFTLY
9.37am GMT
Boom! Shares in Renault are sliding following a report that auto magnate Carlos Ghosn faces arrest in Japan.
According to the Asahi newspaper, Ghosn is being probed by prosecutors for allegedly violating Japan's financial instruments and exchange act.
9.19am GMT
Shares in UK builders are dropping this morning, following a report that house prices have fallen 1.7% this month.
Online estate agent Rightmove reported that the average house price fell by 5,000 in November, with wealthy parts of the South East suffering the biggest reversal.
"Higher-end, former hotspot towns are now among the biggest annual fallers with Rickmansworth (-7.1%), Esher (-6.4%) and Gerrards Cross (-6.0%) now cold spots following price rises of nearly 40% over the seven preceding years."
Related: UK house prices fall by 5,000 on average, with south sliding fastest
9.07am GMT
The pound has risen in early trading, shaking off some of last week's losses.
Sterling is up 0.25% at $1.287 against the US dollar, as Theresa May continues to show impressive sticking power.
"This is absolutely the day at which we stand at the bar of history on this.....
"It is quite clear to me that the captain is driving the ship at the rocks.
...and Theresa May will continue to present herself as the only grownup in the room, selling her deal to businesses while her MPs plot. https://t.co/mzYa3MFU66
Will we get to those 48 no confidence letters? "aTMi But if it doesn't happen within a day or two, many at Westminster may conclude the ERG's rebel leaders are all and no .
8.51am GMT
Despite the war of words between the US and China, European stock markets have opened higher.
In London, the FTSE 100 is up around 0.5%, with similar gains in other major markets:
U.S. Vice President Mike Pence didn't give the bulls what they wanted over the weekend. At the Asia-Pacific Economic Cooperation Summit, Pence said there would be no end to U.S. tariffs on Chinese goods until China changes its ways. His comments suggest that a deal between President Trump and President Xi is unlikely to see the light when the leaders meet at the G20 Summit later this month.
Given that we are near the end of the earnings season and the U.S. economic calendar has only tier 2 data to release, expect markets to trade on thin volumes. Political headlines will likely dominate, and thus expect volatility to remain high.
8.43am GMT
China's Global Times, the state-sponsored newspaper, is often a good guide to Beijing's thinking.
And today's editorial argues that it's "not a big deal" that the APEC summit ended without a joint communique for the first time in a quarter of a century.
"It's delusional of some US elites to think that China is the largest beneficiary of the international system since they mistakenly blame China for the US' own problems. China has realized its development through hard work, not by taking advantage of the international system."
8.37am GMT
8.28am GMT
Analysts at ING are also concerned that Mike Pence and Xi Jinpeng failed to mend any fences, saying:
The risk to global economies and markets from the Sino-US trade war is elevated after an impasse between two countries at the APEC summit
8.27am GMT
The discord between America and China over trade loomed over last weekend's APEC gathering in Papua New Guinea, says Royal Bank of Canada's Sue Trinh:
She writes:
The Sino-US discord was palpable at the APEC Summit in PNG, so much so that the confab ended with members unable to agree on a communiqui(C), for the first time ever.
Aside from this being further evidence of a growing anti-China alliance in the APAC region (watch out for Taiwan's referendum this Saturday to remove "China" from the Olympic team name), the rhetoric is sharpening between the key players.
8.04am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The United States . . . will not change course until China changes its ways.
"We have great respect for President Xi and China, but as we all know, China has taken advantage of the United States for many, many years and those days are over."
Unilateralism and protectionism will not solve problems but add uncertainty to the world economy.
History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, produces no winners."
Related: Apec summit fails to agree on statement amid US-China spat
Mike Pence sounded far more aggressive on the trade issue over the weekend, where the differences between the US and China was laid bare at the Asia Pacific Economic Co-operation meeting, as Xi and Pence, sparred over trade and security.
It appears that #Trump and #China are pretty far apart on Trade issues based on speeches by China Xi and Vice President Pence over the weekend. #Index #futures open lower with the S&P in many downed 12 points. There's probably no miracles coming out of the G 20. $ES_F $SPY pic.twitter.com/2LntWjq3Ow
Related: CBI president to endorse Theresa May's draft Brexit deal
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