Nissan chief hands in resignation, successor to be named

YOKOHAMA, Japan – Nissan Chief Executive Hiroto Saikawa tendered his resignation Monday after acknowledging that he had received dubious income and vowed to pass the leadership of the Japanese automaker to a new generation.

“It would have been better if I had been able to resolve everything first,” Saikawa told reporters, appearing at the end of an evening news conference at company headquarters in Yokohama.

He was referring to deteriorating profits at the automaker and questions about Nissan’s relationship with alliance partner Renault of France, as well as the unfolding financial scandals that have tarnished the brand.

Saikawa’s predecessor, Carlos Ghosn, who led Nissan for two decades, is awaiting trial on various financial misconduct allegations. Ghosn says he is innocent.

“I am sorry to investors, customers and of course our workers,” said Saikawa.

Board member Yasushi Kimura earlier announced that the board had approved Saikawa’s resignation, effective Sept. 16, and a successor would be appointed next month. A search is underway, he added.

Calls for Saikawa’s resignation, which arose after Ghosn’s arrest last year, have grown louder after Saikawa acknowledged last week that he had received dubious payments.

The income was linked to the stock price of Nissan Motor Co., and he has said his pay got inflated after the date for cashing in was illicitly adjusted. He has said he was unaware of the adjustment.

The automaker’s board met to look into the allegations against Saikawa, as well as other issues related to Ghosn’s allegations and corporate ethics at the company.

Kimura said the income Saikawa had received was confirmed as “not illegal.”

Kimura and three other board members, who all have backgrounds outside the company, said their investigation of the scandal over Ghosn’s arrest found that paid and unpaid costs related to the alleged misconduct by Ghosn and Greg Kelly, a former board member who was also arrested, totaled 35 billion yen ($350 million), including damages to the company.

Nissan will seek a repayment of the damages, Kimura said.

The board said about 10 candidates are being considered for Saikawa’s replacement. They did not identify them, but said outsiders and non-Japanese are on the list. Until a successor is decided, Chief Operating Officer Yasuhiro Yamauchi will serve as interim chief, the board said.

Saikawa has not been charged.

“I have been trying to do what needs to be done so that I can pass the baton over as soon as possible,” he told reporters earlier in the day, referring to his willingness to leave his job.

Saikawa has said he didn’t know about the improprieties, promised to return the money and blamed the system he said Ghosn had created at Nissan for the dubious payments.

The internal investigation found that Saikawa had received 47 million yen ($440,000) in inappropriate extra compensation, according to a board statement released Monday.

Ghosn has been charged with falsifying documents on deferred compensation which he had not received. He has also been charged with breach of trust for allegedly funneling company money for personal gain. The investigation listed as examples the use of company jets by his family, use of company money for family vacations and personal gifts and donations to universities.

Nissan’s profits and sales have tumbled over the past year. Investors are also worried about Nissan’s relationship with alliance partner Renault SA of France, which owns 43% of Nissan. Ghosn was sent in by Renault.

Jacques Deguest, an investor and expert on Japanese business, said Nissan needs a strong leader to bring back confidence in the company and lead a turnaround. He also said he was puzzled about why Ghosn faces criminal charges but Saikawa has received more lenient treatment.

“There is in effect a double standard,” he said.

Saikawa said Ghosn has a heavy responsibility for having created the crisis at Nissan.

“That is his biggest responsibility and his biggest crime,” he said. “And I have yet to hear any apology from him.”