Exiled Auto Boss Carlos Ghosn Removed as Mitsubishi Chairman Following Arrest

Ghosn was arrested last week for under-reporting his income and "significant acts of financial misconduct."

The hits keep coming for former Nissan chairman Carlos Ghosn. In the wake of his arrest and subsequent downfall at fellow Alliance automaker Nissan, Mitsubishi has dropped Ghosn from his position as chairman after a unanimous board vote held on Monday, according to CNN

In the interim, CEO Osamu Masuko will take his place. “It was an agonizing decision,” Masuko told the press. “The priority was what to do to protect the company, what to do to protect our employees and their families. It was an unavoidable decision.” For now, Ghosn hangs on to his position of chairman and CEO at the third Alliance company, Renault. 

Last Monday, the auto industry tycoon was arrested in Tokyo for under-reporting his compensation, violating Japan’s Financial Instruments and Exchange Act, as well as conducting “significant acts of financial misconduct.” Since then, reports have surfaced alleging Ghosn of setting up hidden, post-retirement payments as well as funneling Nissan funds to buy several houses and give to various members of his family. According to prosecutors, Ghosn and fellow Nissan director Greg Kelly conspired to understate Ghosn’s income by a total of $44 million from 2010 to 2015.

The Japanese government reportedly considers these crimes more serious than insider trading. For filing false financial statements, Ghosn faces up to 10 years behind bars and a maximum fine of $89,000—effectively the equivalent of a speeding ticket to somebody with Ghosn’s net worth. 

Despite getting booted from chairman positions at both companies, the Brazilian-born car exec remains, officially, a director at Nissan and Mitsubishi since separate shareholder votes are required to oust him from that position.