Nissan and Mitsubishi stocks movements after Ghosn’s arrest

0
204


Shares of Japanese automakers Nissan and Mitsubishi Motors plunged on Tuesday following the arrest of executive Carlos Ghosn.

In the morning of Asian trade, Nissan’s stock fell more than 4 percent while Mitsubishi plunged more than 7 percent.

Ghosn, who is chairman of Nissan and a board member at Mitsubishi, was arrested Monday in Tokyo on allegations of financial misconduct.

Nissan said in a statement on Monday that “over many years,” Ghosn and board director, Greg Kelly, had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report. According to Reuters, Japanese media said Ghosn had reported about 10 billion yen ($88.9 million) of annual compensation as about 5 billion yen for several years.

In a press conference Monday, Nissan Chief Executive Hiroto Saikawa, said both men had been arrested and he would propose to the board on Thursday to remove them from their roles. Mitsubishi also said that it would seek to remove Ghosn, who sits on its board of directors, from his current position at the company.

Ghosn is also chairman and CEO of Nissan’s French partner Renault, and his arrest has thrown into question the future of their alliance.

Renault owns 43.4 percent of Nissan, while Nissan owns 15 percent of Renault, with no voting rights in a partnership that began in 1999. Since 2016, Nissan has held a 34 percent controlling stake in its smaller Japanese rival, Mitsubishi.

One analyst told CNBC’s “Squawk Box” on Tuesday that the alliance will likely to continue despite Ghosn’s arrest.

“Our belief is that the alliance will continue to pursue the joint activities,” said Janet Lewis, head of industrials research, Asia, at Macquarie Capital Securities. “It did not depend on one person, there are hundreds of Renault and Mistubishi and Nissan employees working together on these projects.”

“The degree of integration at lower levels is substantial, nobody wins if they decide to, to move away,” she said.

Renault shares were down more than 8 percent in European trade on Monday.

— CNBC’s David Reid and Robert Ferris, and Reuters contributed to this report.



Source : CNBC