After the arrest of Carlos Ghosn amidst allegations of financial misconduct, the future of the Renault-Nissan-Mitsubishi alliance is set to go through a turbulent phase in order to survive in his absence.
Ahead of Nissan's announcement of removing Carlos Ghosn as the company chairman, the focus has now shifted on the fate of both Ghosn as well as the Renault-Nissan-Mitsubishi alliance. While Carlos Ghosn and his aid in the entire affair, Greg Kelly, had been arrested by the Japanese authorities a few days back, the particulars of their financial misconduct have come to light only recently.
Japanese prosecutors have revealed that Ghosn and Kelly allegedly collaborated to under-report Ghosn's income by about 5 billion yen (USD 44 million) over a five-year period which ended in March 2015. Adding on to this, Nissan's internal investigation also uncovered various other acts of misconduct by Ghosn, which include the inappropriate personal use of company assets and manipulation of the company budget for personal gains. At present, the maximum punishment for filing a false financial statement with the Tokyo Stock Exchange is up to 10 years in prison accompanied by a fine of up to 10 million yen (USD 89,000 approximately).
In response to Ghosn's arrest, independent CEOs of Nissan Motor Company and Mitsubishi have initiated an internal probe which will begin with the removal of Ghosn as the chairman of the grand alliance. Renault is yet to announce its plan of action, taking a more cautious approach. Despite the announcements of Ghosn's speedy removal from the board, stocks of all three companies involved plummeted in their respective countries of origin.
The alliance itself, which began with the initial coming together of Nissan and Renault, was the brainchild of Ghosn. Mitsubishi joined the alliance in 2016 when Nissan purchased 34 per cent of its stock. However, the person who was responsible for reviving the fortunes of both Nissan and Renault now seems to be the reason because of which the companies might face a really difficult time ahead. There are concerns that the alliance could falter without Ghosn's leadership, but it all comes down to how the companies plan on absorbing the news and the resulting financial losses. As of now, the companies are committed to the alliance.