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Exclusive: Nissan expands Ghosn probe to include Renault alliance - sources

Published 11/20/2018, 10:22 AM
© Reuters. Carlos Ghosn, chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, attends the Tomorrow In Motion event on the eve of press day at the Paris Auto Show, in Paris
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By Laurence Frost

PARIS (Reuters) - Nissan's investigation into alleged misconduct by Chairman Carlos Ghosn is expanding to include Renault-Nissan finances, sources told Reuters - in a further sign that Nissan may seek to loosen its French parent's hold on their global carmaking alliance.

Nissan told Renault's board on Monday it had evidence of potential wrongdoing at Renault-Nissan BV, the Dutch venture overseeing alliance operations under Renault's ultimate control, three people with knowledge of the matter said.

The private communication from Nissan Chief Executive Hiroto Saikawa came as the Japanese carmaker, 43.4 percent-owned by Renault (PA:RENA), announced that an investigation had uncovered misconduct involving Ghosn including under-reporting of his compensation and personal use of company assets.

Renault and Nissan both declined to comment.

Saikawa, once Ghosn's protégé, also disclosed plans to strip Ghosn of his chairmanship, after the 64-year-old industry veteran was arrested in Tokyo along with fellow director Greg Kelly.

Neither of the detained men has had the opportunity to comment publicly on the allegations against them.

The 19-year history of the Renault-Nissan alliance, enlarged in 2016 to include Mitsubishi Motors, has been marked by tensions among the carmakers and the French government, Renault's main shareholder with a 15 percent stake.

Under government pressure, Ghosn, who is also Renault chairman and CEO, had agreed this year to explore a closer tie-up that would tap deeper synergies, safeguard French industrial interests and make the alliance "irreversible".

The plan raised hackles in Tokyo. Nissan, while almost 60 percent bigger than Renault by sales, remains the junior partner in their shareholding hierarchy with a smaller reciprocal 15 percent non-voting stake in Renault.

At a news conference in Japan late on Monday, Saikawa outlined three broad categories of accusation against Ghosn: under-reporting of compensation; misrepresenting company investments; and making personal use of company assets. He gave no examples, citing the secrecy of a police investigation.

The Nissan CEO nevertheless took aim at a Renault-led alliance setup that "concentrates power in one individual", and said a new board committee would examine its role in the scandal.

"In terms of structural issues, 43 percent is held by Renault and the head of Renault is currently serving as (chairman) of Nissan," Saikawa said.

"Of course this isn't the only cause, but it's one of the factors or drivers. So the committee ... will have a deep dive on this issue as well."

French officials have mobilized to defend the alliance since Ghosn's surprise arrest in Japan - which came as both countries stage events to mark 160 years of diplomatic relations.

President Emmanuel Macron said France would "remain extremely vigilant regarding the stability of the alliance", the world's largest automotive grouping by sales.

Finance Minister Bruno Le Maire, who said the future of the industrial pairing was top priority, also pressed Renault's board to appoint interim leadership, saying Ghosn was "no longer in a position where he is capable of leading Renault".

© Reuters. Carlos Ghosn, chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, attends the Tomorrow In Motion event on the eve of press day at the Paris Auto Show, in Paris

The board, meeting later on Tuesday, will likely agree that director Philippe Lagayette should fill in as chairman, several people with knowledge of the deliberations said. It may also bolster Chief Operating Officer Thierry Bollore's powers.

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