The board of directors of Mitsubishi Motors has removed Carlos Ghosn as chairman, a week after he was arrested in Tokyo on suspicion of financial misconduct. Mr. Ghosn, was already stripped of the chairmanship of Nissan last week in a unanimous vote of the board.
Ghosn remains in a Tokyo detention center, where he sees his lawyer for about an hour or so each day. He is being questioned by prosecutors after Nissan said that he underreported his income to Japanese regulators over several years. He has not been charged with any crime.
In a statement on Monday, Osamu Masuko, chief executive of Mitsubishi, said the board had removed Mr. Ghosn because:
“He [Ghosn] lost the trust of Nissan and he cannot execute his duties as chairman and representative director any longer. If Mr. Ghosn remained as chairman, it could expose Mitsubishi to “reputation risk.”
It has been a remarkably swift fall from grace for Carlos Ghosn, who is considered as one of the auto industry’s most powerful leaders. He has long been admired in Japan, where Nissan employs more than 22,000 people and Mitsubishi employs more than 30,000. He was known as the man who rescued Nissan, becoming one of his generation’s most successful chief executives as he orchestrated an alliance with Renault and Mitsubishi that effectively made the group the world’s largest seller of cars.
Prosecutors have also been questioning Greg Kelly, a former Nissan human resources manager who was also removed from the company’s board last week over allegations that he conspired with Mr. Ghosn to underreport Mr. Ghosn’s compensation in government securities filings and to use company funds for personal expenses. Nissan has described Mr. Kelly as “the mastermind of this matter, together with Carlos Ghosn.”