Mitsubishi Follows Nissan in Dismissing Ghosn as Chairman

Tokyo, Nov. 26 (Jiji Press)--Mitsubishi Motors Corp.'s <7211> board of directors on Monday voted to dismiss Carlos Ghosn, a board member, as its chairman and to strip him of his right to represent the company, following in the footsteps of its top shareholder, Nissan Motor Co. <7201>. The decision was made at an extraordinary meeting of the board, convened after Ghosn's arrest by Tokyo District Public Prosecutors Office on Nov. 19 on suspicion of understating his executive pay from Nissan in the firm's securities reports, in violation of Japan's Financial Instruments and Exchange Act. Mitsubishi Motors also decided that its chief executive officer, Osamu Masuko, will double as chairman for the time being, until its next shareholders' meeting. Nissan dismissed Ghosn as its chairman and deprived him of his representative right at its extraordinary board meeting on Thursday. Ghosn, who is from French auto giant Renault SA, remains on the Nissan board. Renault and the two Japanese automakers have an alliance partnership, with Renault being the top shareholder of Nissan, with a stake of 43.4 pct, and Nissan holding a stake of 15 pct in Renault and 34 pct in Mitsubishi Motors. Renault is owned 15 pct by the French government. Earlier on Monday, Nissan President Hiroto Saikawa explained the removal of Ghosn as the firm's chairman to all employees and apologized for the turmoil. Saikawa was quoted as saying that Ghosn's misconduct came because authority had been concentrated on him and that the firm plans to overhaul its management system to prevent any similar incident. "I want to create an environment where our workers can work positively," Saikawa was also quoted as saying. Ghosn led Nissan's decision on its investment in Mitsubishi Motors after the latter was hit by a fuel economy data manipulation scandal in 2016. He became Mitsubishi Motors' chairman and representative board director in December that year. On the reasons behind Ghosn's dismissal, Mitsubishi Motors pointed to Nissan's loss of trust in Ghosn and difficulties continuing its operations. The removal was inevitable to protect the company and its stakeholders, including its shareholders and client firms, Masuko told reporters after the board meeting. The early removal of Ghosn is also aimed at dispelling concerns over the company's corporate governance, according to informed sources. A third-party panel set up by Mitsubishi Motors is investigating whether there was any wrongdoing related to Ghosn's pay at the company. The panel is expected to report to a board meeting next month. Masuko also indicated a plan to review the effectiveness of Mitsubishi Motors' corporate governance and reward system. Within the three-way alliance, Renault has so far refrained from deciding on the removal of Ghosn. He serves as chairman and CEO at Renault. Executives of Renault, Nissan and Mitsubishi Motors are expected to confirm the three companies' intentions to maintain the alliance, at a meeting to be held in Amsterdam within this week. Masuko said Mitsubishi Motors hopes to maintain the three-way tie-up. END