Published: Wed, November 21, 2018
Markets | By Erika Turner

Renault names Ghosn stand-ins amid tension over Nissan probe

Renault names Ghosn stand-ins amid tension over Nissan probe

Ghosn's compensation from Nissan, generous by Japanese standards, was only part of his overall income since he also was paid salaries by the automaker's alliance partners Renault SA and Mitsubishi Motor Corp.

The arrest of Nissan Motor chairman Carlos Ghosn on Monday stunned Japan and the wider business community, sending shares of Nissan and Renault plummeting.

Ghosn, 64, has not been formally charged.

He's been "the glue that holds Renault and Nissan together", Bernstein analyst Max Warburton wrote in a note to investors.

But there have always been tensions as Nissan, while nearly 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.

In fact, Nissan's investigation into alleged misconduct by 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.

Renault's board is due to meet on Tuesday to discuss replacing Ghosn as chief executive.

Economy Minister Bruno Le Maire told France Info radio that he had ordered an inquiry into Ghosn's tax affairs immediately after learning of his arrest in Japan but that it showed up "nothing in particular" about his tax situation in France. The French government owns 15 percent in Renault and has a say in its operations. He will also try to have Kelly removed from the board.

Ghosn, one of the vehicle industry's best known leaders, was arrested on Monday after Nissan Motor Co said he had engaged in wrongdoing at the Japanese firm, including personal use of company money and under-reporting his earnings, for years.

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Ghosn is also chairman of Mitsubishi Motors.

While Mr Ghosn is yet to be relieved of his role, Mr Saikawa revealed a proposal for his removal has been put forward to Nissan's board of directors with a decision - made with alliance partners Renault and Mitsubishi executives - expected by week's end. "Operating in the shadows of Ghosn's leadership, he [Kelly] had control of the company", President and Chief Executive Officer Hiroto Saikawa said at a press conference on Monday.

Nissan chief executive Mr Saikawa insisted the partnership "will not be affected by this event".

Mr Ghosn officially still leads the Renault-Nissan-Mitsubishi alliance as chief executive and chairman.

The companies now share technology, and they save money by jointly purchasing components.

He has been credited with turning around both Nissan and Renault before becoming the linchpin of the alliance the companies later formed. "So I do feel a little betrayed because he essentially was being dishonest", Noriko Handa, a housewife in her 50s, said as she walked near downtown Tokyo's Shimbashi train station.

Later in the evening, the automaker said it plans to dismiss Ghosn and Kelly.

The brash Ghosn was once viewed as a savior in the auto business with the ability to turn around the two struggling companies. The alliance sold 10.6 million vehicles past year.

Saikawa reiterated Nissan's commitment to the venture, while a Renault statement expressed "dedication to the defense of Renault's interest in the alliance".

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