Thank you all for your posts. I value your opinions a lot.
You've really captured the essence of the situation which seems pretty bad. I can sense the uneasiness of the other employees but there's also a sense of fear there, of losing one's job and because of all this huge change.
I've decided to reveal the wrongdoings of my boss and then negotiate myself out of the company. I don't think they'll sack him since he's friends with our new chief executive. I know my boss hates me around him, especially when I'm in a position to challenge him (which I haven't done, yet) and I might get a good deal just resigning.
I know, it's a position I've reached through hard work but I don't think things will change for better in a while. I'll go freelance or find another company with better values and respect for diversity.