Nissan shareholders furious at Ghosn scandal and dismal results

Carlos Ghosn
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Updated 18 February 2020

Nissan shareholders furious at Ghosn scandal and dismal results

  • One furious investor proposed bounty on former chief now living in Lebanon

TOKYO: Nissan shareholders vented their outrage at the Japanese automaker’s top management Tuesday for crashing stock prices, zero dividends and quarterly losses after the scandal-ridden departure of former Chairman Carlos Ghosn.

They got up, one by one, at an extraordinary shareholders’ meeting, demanding that Nissan Motor Co. quickly fix diving car sales, work harder to repair its battered brand and have executives give up their pay.

Ghosn, a superstar executive who had led Nissan for two decades, was arrested in November 2018. He was awaiting trial on financial misconduct charges in Tokyo when he skipped bail late last year and escaped to Lebanon.

New Chief Executive Makoto Uchida apologized for having “allowed the misconduct” of Ghosn and promised better governance, transparency and financial results, but pleaded for more time.

He said a turnaround plan will be announced in May, which one shareholder immediately criticized as too late.

“We are in a disastrous situation,” Uchida said of the Ghosn scandal. “It was shocking, and I denounce it.”

Uchida is among the four directors whose election was up for vote at the meeting held at a conference center in Yokohama, near Tokyo, where Nissan is headquartered.

FASTFACT

44%

Renault owns 44 percent of Nissan.

Uchida was tapped in December to replace Hiroto Saikawa, who was Ghosn’s successor.

Saikawa tendered his resignation last year after allegations surfaced about his own dubious personal income. Saikawa’s resignation becomes final at the end of the shareholders’ meeting.

One shareholder asked if Saikawa was giving up his retirement pay.

Another asked why Jean-Dominique Senard, chairman of French alliance partner Renault SA and Nissan board member, was seen leaving a previous shareholders’ meeting in a Toyota.

Saikawa did not reply. Senard apologized and said it was a mistake that had upset him as well.

Global sales of Nissan vehicles have plunged. Nissan recorded red ink for the quarter through December, the first such quarterly loss in 11 years.

Nissan’s prized technology, such as electric vehicles and automated driving, will be featured in planned models, Uchida said.

Also up for approval at the meeting was the appointment of Nissan Chief Operating Officer Ashwanti Gupta, who joined Renault in India in 2006, and has since worked for the alliance, which also includes smaller Japanese automaker Mitsubishi Motors Corp.

The appointment of Nissan’s production expert Hideyuki Sakamoto and Pierre Fleuriot, a risk management specialist and independent director at Renault, was also up for vote.

Renault owns 44 percent of Nissan and so the proposals were certain to pass. The appointments were welcomed by clapping at the end of the two-and-a-half hour meeting. The executives bowed on stage.

But hanging over the entire meeting was Nissan’s plummeting fortunes, its reputation tarnished over not only the Ghosn scandal but the shaky way it was handled at the company.

Shareholders said they saw confusion in management.

One argued no one would want to buy a car from a company that looked as disorganized as Nissan. At one point, several shareholders began shouting at each other.

Another shareholder proposed putting a bounty on Ghosn so he could be brought back to stand trial. Japan and Lebanon do not have an extradition treaty.

Ghosn, who has insisted on his innocence, has said he was targeted with trumped up charges because of what he called a conspiracy at Nissan to block a fuller merger with Renault.


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.