x

Abu Dhabi, UAEThursday 13 December 2018

France keen to retain Renault-Nissan partnership despite Ghosn's arrest

Alliance a key part of French leader Macron’s effort to revive his country as an economic power

French President Emmanuel Macron, left, and Renault CEO Carlos Ghosn, France is keen tio maintain relationship with Nissan. AP
French President Emmanuel Macron, left, and Renault CEO Carlos Ghosn, France is keen tio maintain relationship with Nissan. AP

French President Emmanuel Macron told Japanese Prime Minister Shinzo Abe he wants to maintain the alliance between Renault and Nissan after the arrest of Carlos Ghosn, who led the partnership.

“The exchange on Renault was succinct, with only the reminder that the legal procedure had to follow its course,” the president’s office said after the leaders met Friday on the sidelines of the Group of 20 summit in Buenos Aires. Mr Macron “reiterated his commitment to preserving the alliance as well as the stability of the group”.

Mr Abe told Mr Macron that the future of the Nissan-Renault alliance should be decided among the companies and not by the government, Nikkei reported, citing the Japanese government.

Mr Macron and Mr Abe met just hours after Japanese prosecutors extended the detention of Mr Ghosn by up to 10 days, sources said. He was arrested on November 19 in Japan on accusations of understating his income and misusing company funds. The Franco-Brazilian executive has denied the allegations, according to NHK, Japan’s national broadcaster.

The arrest raised questions about the future of the alliance between Renault and Nissan that Mr Ghosn, 64, built and oversaw for almost two decades. The pact gives more weight to Paris than to Tokyo, a long-running source of frustration for the Japanese. Renault is considered a company of “vital importance” to France by the state secretariat for national security.

_______________

Read more:

Business Extra podcast: Emaar checks out of five Dubai hotels

Lebanon summons Japanese ambassador over Carlos Ghosn case

_______________

The French car maker employs almost 50,000 people in France, making it a key part of Mr Macron’s effort to revive his country as an economic power. Renault owns 43 per cent of Nissan, while the Japanese car maker has 15 percent of Renault, without voting rights.

Renault has been happy with the status quo, and has been looking to make it permanent. The effort has been championed by its largest shareholder, the French state. Neither Renault, nor Mr Macron’s government, had any idea that Mr Ghosn was about to be taken into custody last week, sources said earlier.

Before the meeting Friday, an official in Mr Macron’s office had said the French president would tell Mr Abe he wanted more information and greater transparency about the Ghosn probe, according to Bloomberg.

Nissan has been eager to equalise power at the alliance level and assert Japanese control over one of the country’s most important companies, according sources. That’s led to fears on the French side that Mr Ghosn’s arrest may have been orchestrated in what amounts to a coup, a charge Nissan chief executive Hiroto Saikawa has denied.

Nissan and Mitsubishi Motors, which joined the alliance in 2016, have both ousted Mr Ghosn as chairman since his arrest. Renault has so far kept him on as chairman and chief executive, while appointing Thierry Bollore to run the company on a temporary basis.

On Thursday, Nissan’s former representative director Greg Kelly denied allegations of financial misconduct at the car maker, his lawyer said.

Mr Kelly and Mr Ghosn were arrested on November 19 on suspicion of falsifying the Japanese firm's annual reports to understate Mr Ghosn's remuneration over several years.

"There was no additional compensation that needed to be stated" in the annual reports, the lawyer, Yoichi Kitamura, told Reuters.

"All Ghosn received in compensation was included in Nissan's annual financial statements," he said.