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Abu Dhabi, UAESaturday 23 February 2019

France rounds on Ghosn as government calls for his ousting from Renault

Fallen chief of Nissan and Mitsubishi faces final humiliation as his position at French car maker looks doomed

Carlos Ghosn appears to have been abandoned by the French government regarding his position at Renault. AFP 
Carlos Ghosn appears to have been abandoned by the French government regarding his position at Renault. AFP 

France is turning on Carlos Ghosn almost two months after his shock arrest in Tokyo, eliminating one of the car titan’s last potential allies within the global auto alliance he has held together for almost two decades.

The French government has called for Mr Ghosn’s dismissal as chairman and chief executive of alliance member Renault, which refused to follow partners Nissan and Mitsubishi Motor in sacking the fallen car star shortly after he was detained on November 19. France is the largest investor in Renault, which was caught unawares when Japanese prosecutors acted on allegations of Mr Ghosn’s financial misconduct over years at Nissan.

“We are entering now a new phase,” Finance Minister Bruno Le Maire told LCI Television. “In this new phase we need a new and durable governance for Renault.”

French officials - among them a Renault board member - arrived in Tokyo to discuss the future of Renault’s partnership with Nissan. Mr Ghosn’s shock arrest at Tokyo’s Haneda airport has jolted the world’s biggest auto alliance, raising questions over whether their partnership will survive his downfall.

Renault’s board will probably meet in coming days to replace him, sources said earlier. The board was spurred into action by Mr Ghosn’s failure this week to win bail, which points to a lengthy incarceration and would prevent him from carrying out his roles at Renault, they said.

While his lawyers on Thursday appealed the latest bail rejection, they have previously acknowledged that he may stay in custody until his trial, which could be six months away.

Mr Ghosn has been indicted for understating his income at Nissan by tens of millions of dollars and transferring personal trading losses to the car maker. Nissan has also accused him of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract. The executive has said he’s innocent and has called the accusations “meritless and unsubstantiated”.

French officials are visiting Tokyo to discuss the future of the alliance between the car makers, government spokesman Benjamin Griveaux said earlier in Paris. The state’s priority is to defend the “stability” of the partnership and the jobs it provides, he said.

The delegation includes Martin Vial, who heads the agency that oversees French state shareholdings and sits on Renault’s board, and Emmanuel Moulin, Mr Le Maire’s chief of staff, a ministry spokesman said.

Renault and the French state had cited the principle of presumed innocence in backing Mr Ghosn, while Nissan and smaller alliance partner Mitsubishi removed him as chairman. Accusations against him mounted this week, including a reported €7 million payment (Dh29.26m) from a Dutch entity named NMBV that is part of the manufacturing partnership he assembled between the three car makers.

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Nissan chief executive Hiroto Saikawa was interviewed in the French press this week, defending his efforts to remove Mr Ghosn and seeking to downplay the portrayal of the saga as a power struggle. Mr Ghosn’s arrest created a climate of suspicion between the companies.

While both firms have repeatedly said they are committed to the alliance, Nissan has long been unhappy about what it considers an outsized French role in the partnership. Renault has a 43 per cent voting stake in Nissan, which in turn owns just 15 per cent of the French company, with no voting rights.

Some Renault board members have concluded that a decision on Mr Ghosn’s position is needed fast, one of the sources. There’s no way he can stay in charge of Renault, no matter how the legal saga ends, the source said.

“Renault must realise Ghosn had stepped beyond what is appropriate,” said Janet Lewis, a Tokyo-based auto analyst with Macquarie. “Too much power would appear to have accrued to one person, so it is important to try and develop a leadership team that can continue the work of the alliance.”

A spokesman for Renault declined to comment on any possible changes in governance at the car maker.

A spokesman for Nissan reiterated the company’s internal investigation uncovered “substantial and convincing evidence of misconduct”. The spokesman declined to comment on managerial decisions at Renault. Mr Ghosn’s lawyers, represented by Motonari Otsuru, had no comment.

The state has called for a Renault board meeting in the next few days, Mr Le Maire said. Interim chief executive Thierry Bollore’s mandate could be made more permanent, while Michelin CEO Jean-Dominique Senard is the leading candidate to become chairman, a source told Bloomberg.

Others under consideration include senior Toyota executive Didier Leroy and Elior boss Philippe Guillemot, another source told Reuters.

Elior has denied Mr Guillemot was a candidate, but acknowledged he may have been considered.

Mr Le Maire, asked about Mr Senard, described him as a “great industrial manager”.

Updated: January 17, 2019 12:39 PM

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