Nissan shareholders approve dismissal of Carlos Ghosn from board

An internal Nissan investigation discovered payments of a consultation fee to Carlos Ghosn’s sister for 13 years. (AFP)
Updated 08 April 2019
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Nissan shareholders approve dismissal of Carlos Ghosn from board

  • Ahead of the vote, Nissan’s top executive apologized to its shareholders for the scandal
  • More than 4,000 people gathered at a Tokyo hotel for a three-hour extraordinary shareholders’ meeting

TOKYO: Nissan shareholders approved on Monday the ouster from the Japanese automaker’s board former Chairman Carlos Ghosn, who faces allegations of financial misconduct.
The approval was shown by applause from the more than 4,000 people gathered at a Tokyo hotel for a three-hour extraordinary shareholders’ meeting. Other votes had been submitted in advance.
Ahead of the vote, Nissan’s top executive apologized to its shareholders for the scandal at the Japanese automaker and asked them to approve Ghosn’s dismissal.
Chief Executive Hiroto Saikawa and other Nissan Motor Co. executives bowed deeply in apology to shareholders attending the extraordinary meeting at a Tokyo hotel.
Shareholders also approved the appointment of French alliance partner Renault SA’s chairman Jean-Dominique Senard to replace Ghosn. Renault owns 43 percent of Nissan.
Senard, introduced to shareholders at the meeting’s end, thanked them and promised to do his best to keep the automaker’s performance on track.
“I will dedicate my energy to enhance the future of Nissan,” said Senard.
They likewise also gave a green light to removing from the board a former executive direct, Greg Kelly, who has been charged with collaborating with Ghosn in the alleged misconduct.
Angry shareholders demanded an explanation for how wrongdoing on an allegedly massive scale had gone unchecked for years. The meeting was closed except to stockholders but livestreamed.
One shareholder said Nissan’s entire management should resign immediately. Saikawa said he felt his responsibility lay in fixing the shoddy corporate governance at Nissan first, and continuing to lead its operations. Another shareholder asked if Nissan was prepared for a damage lawsuit from shareholders since its stock price has plunged.
“I deeply, deeply apologize for all the worries and troubles we have caused,” Saikawa said. “This is an unprecedented and unbelievable misconduct by a top executive.”
He outlined the findings of an internal investigation, such as payments of a consultation fee to Ghosn’s sister for 13 years. The investigation has also found too much power had been focused in one person, he said.
Ken Miyamoto, 65, a Nissan shareholder, said he was disappointed.
“It is really such a pity as he was a brilliant manager,” Miyamoto said of Ghosn before heading into the meeting. “I guess he became complacent as people kept praising him too much.”
Ghosn says he is innocent of all allegations and has suggested the accusations were made by some people at Nissan hoping to remove him from power.
He has been charged with under-reporting his compensation in financial documents, and with breach of trust in having Nissan shoulder investment losses and making suspect payments to a Saudi businessman. Ghosn says the compensation was never decided on or paid, no investment losses were suffered by Nissan, and the payments were for legitimate services.
Ghosn was arrested in November, released on bail in early March and then re-arrested for a fourth time last week. The latest arrest was in connection with fresh allegations that $5 million sent by a Nissan Motor Co. subsidiary and meant for an Oman dealership was diverted to a company effectively controlled by Ghosn.
His detention on that allegation has been approved through April 14 but could be extended. The date of his trial has not been set.
Yokohama-based Nissan, which makes the Leaf electric car, March subcompact and Infiniti luxury models, was on the brink of bankruptcy when Renault sent Ghosn to turn it around two decades ago.
The Renault-Nissan-Mitsubishi Motors alliance now rivals auto giants Volkswagen AG of Germany and Japanese rival Toyota Motor Corp. in global sales.
Saikawa told shareholders the company will stick by the alliance, fix its governance problems and make the ouster of Ghosn “a turning point.”
“We had allowed a system in which wrongdoing could be carried out without detection,” he said.


No need for more talks over draft budget: Lebanon finance minister

Updated 21 May 2019
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No need for more talks over draft budget: Lebanon finance minister

  • Lebanon’s proposed austerity budget may please international lenders but it could enrage sectors of society
  • Lebanon has one of the world’s heaviest public debt burdens at 150 percent of GDP

BEIRUT: Lebanon’s finance minister said on Tuesday there was no need for more talks over the 2019 draft budget, seen as a vital test of the government’s will to reform, although the foreign minister signalled the debate may go on.
The cabinet says the budget will reduce the deficit to 7.6% of gross domestic product (GDP) from last year’s 11.2%. Lebanon has one of the world’s heaviest public debt burdens at 150% of GDP.
“There is no longer need for too much talking or anything that calls for delay. I have presented all the numbers in their final form,” Finance Minister Ali Hassan Khalil said.
But Foreign Minister Gebran Bassil suggested the debate may go on, telling reporters: “The budget is done when it’s done.”
While Lebanon has dragged its feet on reforms for years, its sectarian leaders appear more serious this time, warning of a catastrophe if there is no serious action. Their plans have triggered protests and strikes by state workers and army retirees worried about their pensions.
President Michel Aoun on Tuesday repeated his call for Lebanese to sacrifice “a little“: “(If) we want to hold onto all privileges without sacrifice, we will lose them all.”
“We import from abroad, we don’t produce anything ... So what we did was necessary and the citizens won’t realize its importance until after they feel its positive results soon,” Aoun said, noting Lebanon’s $80 billion debt mountain.
A draft of the budget seen by Reuters included a three-year freeze on all forms of hiring and a cap on bonus and overtime benefits.
It also includes a 2% levy on imports including refined oil products and excluding medicine and primary inputs for agriculture and industry, said Youssef Finianos, minister of public works and transport.
“DEVIL IN THE DETAIL“
Marwan Mikhael, head of research at Blominvest Bank, said investors would welcome the additional efforts in the latest draft to cut the deficit.
“There will be some who claim it is not good because they were hit by the decline in spending or increased taxes, but it should be well viewed by the international community,” he said.
Jason Tuvey, senior emerging markets economist at Capital Economics, said: “The numbers will be of some comfort to investors, but the devil will be in the detail.”
“Even if the authorities do manage to rein in the deficit, it probably won’t be enough to stabilize the debt ratio and some form of restructuring looks increasingly likely over the next couple of years,” Tuvey said.
The government said in January it was committed to paying all maturing debt and interest payments on the predetermined dates.
Lebanon’s main expenses are a bloated public sector, interest payments on public debt and transfers to the loss-making power generator, for which a reform plan was approved in April. The state is riddled with corruption and waste.
Serious reforms should help Lebanon tap into some $11 billion of project financing pledged at a Paris donors’ conference last year.
Once approved by cabinet, the draft budget must be debated and passed by parliament. While no specific timetable is in place for those steps, Aoun has previously said he wants the budget approved by parliament by the end of May.
On Monday, veterans fearing cuts to their pensions and benefits burned tires outside the parliament building where the cabinet met. Police used water cannon to drive them back.