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UPDATE 2-Mitsubishi Motors' board meets to remove Chairman Ghosn

Renault owns 43 percent of Nissan and the Japanese automaker holds a reciprocal 15 percent non-voting stake in the French firm. And Nissan is almost 60 percent bigger than Renault by sales.


UPDATE 2-Mitsubishi Motors' board meets to remove Chairman Ghosn
(Image Credit: Flickr)

Mitsubishi Motors Corp's board will meet on Monday to remove Carlos Ghosn from his role as chairman after his arrest and ouster from alliance partner Nissan Motor Co last week for alleged financial misconduct.

A removal of Ghosn by Mitsubishi's eight-member board, which meets at the automaker's Tokyo headquarters at 1630 (0730 GMT) would see an end to his chairmanship of Japanese automakers amid discontent over French partner Renault SA's role in the 19-year alliance.

Renault and Nissan sealed an alliance in 1999, when the Japanese automaker was rescued from near-bankruptcy. It was enlarged in 2016 to include Mitsubishi and enabled the members to jointly develop products and control costs. The alliance vies with Volkswagen AG and Toyota Motor Corp for the ranking of the world's biggest automaker.

Even as Nissan has recovered and grown rapidly, it remains a junior partner in the shareholding structure. Renault owns 43 percent of Nissan and the Japanese automaker holds a reciprocal 15 percent non-voting stake in the French firm. And Nissan is almost 60 percent bigger than Renault by sales.

Top alliance executives are meeting this week in Amsterdam, aiming to shield their joint operations from the fallout of Ghosn's arrest as a power struggle between Nissan and Renault looms. Renault has refrained from firing him as chairman and CEO.

Nissan CEO Hiroto Saikawa told staff on Monday that the concentration of power in Ghosn meant there was a lack of direct communication between the other alliance board members, a person familiar with the contents of the town hall said.

Nissan said it does not disclose details of internal events or communications to employees.

Ghosn was pushing for a deeper tie-up, including potentially a full merger between Renault and Nissan at the French government's urging, despite strong reservations at the Japanese firm.

Nissan removed Ghosn at a high stakes board meeting on Thursday after allegations of understating his income and using company money for personal use.

Ghosn has denied the allegations, public broadcaster NHK reported on Sunday.

His firing from Mitsubishi Motors would mark the removal of the man credited with stabilising the company after it was rocked by a cheating scandal in 2016.

Nissan holds a controlling 34 percent stake in Mitsubishi Motors and has two executives on the board. The other representative director is CEO Osamu Masuko, who said last week the alliance may be hard to manage without Ghosn.

While the automakers have stressed that operations and business are proceeding as normal, Nissan has postponed the launch of its high-performance Leaf electric car "to ensure that this important product unveiling could receive the coverage it merits", a Nissan spokesman said.

Shares in Mitsubishi Motors rose 3.3 percent, while Nissan climbed 1.8 percent, outperforming the broader market's 0.8 percent gain.

(With inputs from agencies.)

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