Nissan’s board is meeting to pick a chairman to replace Carlos Ghosn, arrested last month on charges of violating financial regulations.
Monday’s meeting comes amid an unfolding scandal that threatens the Japanese automaker’s two-decade alliance with Renault SA of France and its global brand, as well as highlighting shoddy governance at the manufacturer of the Leaf electric car.
Ghosn and another board member Greg Kelly were formally charged last week with falsifying financial reports in underreporting Ghosn’s income by about 5 billion yen ($44 million) between 2011 and 2015. They were arrested Nov. 19 by Tokyo prosecutors and remain in detention.
A source close to Ghosn’s family says Ghosn is innocent as the alleged income was never decided upon or paid. Aubrey Harwell, the U.S. lawyer for Kelly, an American, says he is innocent, and that Nissan insiders and outside experts had advised him the financial reporting was proper.
The chairman must be selected from among the board members. Whether a decision will come Monday remains unclear. Three outside board members, racecar driver Keiko Ihara, Masakazu Toyoda, an academic, and Jean-Baptiste Duzan, formerly of Renault, are making that decision. There are nine board members, including Ghosn and Kelly.
One candidate for chairman is Chief Executive Hiroto Saikawa. Saikawa was hand-picked by Ghosn to succeed him as chief executive. He has denounced Ghosn and Kelly as the “masterminds” in a scheme to falsify income reports and abuse company money and assets.
Renault has kept Ghosn as chief executive and chairman, saying its investigation has not found wrongdoing in the awarding of Ghosn’s compensation.
Nissan Motor Co.’s allegations also include million-dollar homes in several nations, including France, Japan, Brazil, Lebanon and the Netherlands, purchased by Nissan or a subsidiary and used by Ghosn.
Wrangling over a home in Rio de Janeiro has developed into a court battle in Brazil, with Nissan seeking to block Ghosn’s family from retrieving items.
Ghosn was born in Brazil of Lebanese ancestry and holds French citizenship. He was sent in by Renault in 1999, to turn around Nissan from the brink of bankruptcy.
It’s unclear when Ghosn and Kelly may be released as Tokyo prosecutors say they are a flight risk.