France wants to oust Renault's Ghosn and defends its alliance

PARIS / TOKYO (Reuters) – France decided on Tuesday to overthrow Carlos Ghosn from RenaultRENA.PA) a day after his arrest in Japan for charges of financial misconduct, but was seeking to defend the automaker's alliance with Nissan, which was shaken by the scandal.

Ghosn, one of the best known leaders in the automotive industry, was arrested on Monday after the death of Nissan Motor Co (7201.T) has committed wrongdoing, including personal use of the company's money and under-reporting of the amount of his earnings, for years. The Japanese manufacturer plans to remove him from his position as president Thursday.

"Carlos Ghosn is no longer able to lead Renault," said French Finance Minister Bruno Le Maire on France Info radio, calling on Renault's board to meet "in the coming hours" to set up an interim management structure.

The French state holds a 15% stake in Renault, which in turn owns 43% of Nissan's capital in a complex alliance forged by Ghosn in almost 20 years, which analysts say could break up without management. at 64 years old.

Renault's board will meet later on Tuesday, a spokesman for the company said. Sources close to the case told Reuters he would discuss the temporary replacement of Ghosn.

"We have not required the official departure of Ghosn from the board of directors for a simple reason, namely that we have no evidence and that we follow the legal procedures in effect", said The mayor.

He indicated that he would contact his Japanese counterpart about this and that Renault's partnership with Nissan was in the interest of France and Japan, as well as both companies.

"Renault has been weakened, which makes it all the more necessary to act quickly," said The Mayor.

On the brink of bankruptcy when Renault bought out its stake in 1999, Nissan has once again become the engine of an alliance that generates synergies for both companies and allows them to compete with Volkswagen (VOWG_p.DE) and Toyota (7203.T) on the world stage.

Renault shares lost 4.3% at 09:15 GMT, after falling 8.4% Monday. Nissan shares fell again by 5.5%, while those of Mitsubishi Motors (7211.T), third member of the alliance, lost nearly 7%.

Renault shares fell 11% on Monday.

Bank of America Merrill Lynch lowered its rating on Renault from "buy" to "neutral", while Exane BNP Paribas lowered it to "neutral" to "outperform".

The Mayor said he asked the French tax authorities to inquire about Ghosn's business and that they did not find anything particular.

HARD TIME

Uusting Ghosn will ask questions about an alliance that he was committed to consolidating through a closer rapprochement, before finally withdrawing from his operational leadership.

This is coming at a difficult time for the industry, with stricter emissions regulations, lower diesel sales and costly investments in power technology and autonomous driving.

The alleged irregularities of Ghosn also raise questions about the governance of the alliance in which the councils of the three partners are all chaired by a single executive.

A Nissan-based official told Reuters that he feared that decision-making within the alliance would be slowed down due to the lack of a unifying figure.

The manager, who refused to be identified because he was not allowed to talk to the media, said he was also worried that Ghosn's departure would affect sales, fans of the charismatic leader. abandoning the business and corporate customers required to adhere to the compliance rules. scandalous.

The Japanese public broadcaster NHK has announced that Nissan has paid billions of yen for the purchase and renovation of houses for Ghosn in Rio de Janeiro, Beirut, Paris and Amsterdam, citing unidentified sources.

The properties had no commercial purpose and were not among the benefits of Tokyo Stock Exchange deposits, NHK said.

Ghosn did not comment on these allegations and Reuters was unable to contact him for comments. The businessman was born in Brazil, of Lebanese nationality and is of French nationality.

Hitoshi Kawaguchi, Nissan's senior vice president of government relations, on Tuesday met with the Japanese government's chief spokesman, saying the media had asked him to maintain good relations between Japan and France.