Nissan Motor Co. (NSANY) said Thursday that its board voted unanimously to dismiss former chairman Carlos Ghosn following his arrest for alleged financial misconduct earlier this week linked to his role with Japan's second-largest automaker.
The move could potentially test the fate of the world's biggest auto alliance, which was largely crafted and maintained over the past two decades by Ghosn's leadership of both Nissan and Renault SA (RNLSY) , as reports suggest that the French carmaker is looking to name his replacement amid a broader push to deeper the alliance, possibly through a merger, despite increasing resistance from Nissan.
However, Nissan re-affirmed its commitment to the alliance, in which it holds a 15% stake in Renault, while the Paris-based group commands a 43.3% ownership, and said it would leave the chairman's role vacant while a search for a replacement is launched.
Renault shares were marked 0.24% lower in Paris trading Thursday, and changing hands at €58.78 each, but have shed nearly 10% since news of Ghosn's arrest was first reported -- by Japanese media -- early Monday morning. Nissan shares edged 0.78% higher in Japan, prior to the board vote, and closed at 961.5 yen each after hitting a 52-week low of 942 yen in Wednesday trading.
Ghosn is being held in Tokyo, the Public Prosecutors Office said Thursday, and will be detained for at least ten days while officials investigate claims that the 64-year old mis-used company funds and under-stated his income with the assistance of Nissan's representative director, Greg Kelly, who was also arrested in Tokyo.
France's Economy Minister, Bruno Le Maire, said the carmaker, in which the French state has a 15% stake, was "weakened" by Ghosn's arrest and needed to "act quickly" in replacing him. Le Marie, however, echoed sentiments from Nissan that the pair wished to consolidate their Euro-Pacific alliance, which also includes Mitsubishi Motor Co. (MSBHY) .
Renault said Wednesday that chief operating officer Thierry Bollore will assume the role of CEO on an interim basis, but noted that "Mr. Ghosn, temporarily incapacitated, remains Chairman and Chief Executive Officer."
"During this period, the board will meet on a regular basis under the chairmanship of the lead independent director," Renault said in a statement.