Ghosn arrest strains alliance of Renault-Nissan alliance
FRANCE has urged Renault to replace CEO Carlos Ghosn after he was arrested in Japan on financial misconduct allegations, which sources said formed part of an investigation extending to its broader carmaking alliance with Nissan.
Mr Ghosn, one of the car industry's best-known leaders, was arrested on Monday after Nissan Motor said he had engaged in wrongdoing at the Japanese firm, including personal use of company money and under-reporting his earnings, for years. Nissan plans to remove him as chairman on Thursday.
In a sign Nissan may be seeking to loosen its French parent's hold on their alliance, the Japanese company told Renault's board on Monday it also had evidence of potential wrongdoing at Renault-Nissan, the Dutch venture overseeing alliance operations under Renault's ultimate control, three people with knowledge of the matter said.
The private communication came from Nissan CEO Hiroto Saikawa, whose company is 43.4pc-owned by Renault in a complex alliance forged by Mr Ghosn over almost two decades.
In its first public comment since the arrest, Renault yesterday said it remained focused on its partnership with Nissan and Mitsubishi.
"Thierry Bolloré, chief operating officer of the Renault group, is specifically in charge of the continuity of the executive committee of Renault group," it said, sketching out interim arrangements for keeping the company running.
The French state, which owns 15pc of Renault, has begun to distance itself from Mr Ghosn, a French citizen who was born in Brazil and is of Lebanese descent.
"Carlos Ghosn is no longer in a position where he is capable of leading Renault," French Finance Minister Bruno Le Maire told France Info radio.
"Renault has been weakened, which makes it all the more necessary to act quickly," he said. Following talks between Mr Le Maire and his Japanese counterpart Hiroshige Seko, the two ministers issued a joint statement reaffirming support for the Renault-Nissan alliance and a "shared wish to maintain this winning cooperation".
Close to bankruptcy when Renault bought its stake in 1999, Nissan has recovered to be the engine of an alliance that generates synergies for both companies and allows them to rival Volkswagen and Toyota on the global stage.
But there have long been tensions as Nissan, while almost 60pc bigger than Renault by sales, remains the junior partner in their shareholding hierarchy with a smaller reciprocal 15pc non-voting stake in Renault.
Renault shares were down 3pc by yesterday afternoon, having slumped more than 8pc on Monday. Nissan stock fell another 5.5pc, while Mitsubishi Motors, the third member of the alliance, ended down nearly 7pc.
Mitsubishi Motors' CEO Osamu Masuko said it could be hard to manage the alliance without the unifying figure of Mr Ghosn. "I don't think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi," he told reporters in Tokyo.
Mr Ghosn's alleged improprieties also raise questions over governance at the alliance in which the three partners' boards are all chaired by a single executive.
Japan's Nikkei business daily, citing unidentified sources, said Mr Ghosn had received share price-linked compensation of about JPY4bn (€31.2m) over five-years, but it went unreported in Nissan's financial reports.