France asks Renault to replace Ghosn and the Nissan alliance at the test

PARIS / TOKYO (Reuters) – France on Tuesday asked Renault to replace its CEO, Carlos Ghosn, after his arrest in Japan following charges of financial misconduct, which would be part of an investigation. Extending to its alliance with Nissan automaker.

Ghosn, one of the best-known leaders in the auto industry, was arrested on Monday after Nissan Motor Co. committed wrongdoing in the Japanese company, including the personal use of the company's money. society and under-reporting its income for years. Nissan plans to remove him from his presidential duties on Thursday.

In a sign that Nissan may want to ease the alliance of its French group, the Japanese company said Monday at the Renault board that it also had evidence of potential wrongdoing at home. Renault-Nissan BV, the Dutch company overseeing the operations of the alliance under the ultimate control of Renault people with the knowledge of the subject said.

The private communication came from Nissan CEO Hiroto Saikawa, whose company is 43.4% owned by Renault as part of a complex alliance forged by Ghosn for nearly two decades.

The French state, which holds 15% stake in Renault, has begun to stand out from Ghosn, a French citizen born in Brazil and of Lebanese descent.

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

"Carlos Ghosn is no longer able to lead Renault," French Finance Minister Bruno Le Maire told France Info radio, calling on Renault to set up an interim management structure.

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

Following talks between The Mayor and his Japanese counterpart Hiroshige Seko, the two ministers issued a joint statement reaffirming their support for the Renault-Nissan alliance and their "common desire to maintain this winning cooperation".

MAJOR PLAYER

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

But tensions have persisted for a long time, while Nissan, although its sales have exceeded by nearly 60% sales, remains the junior partner in their shareholder hierarchy with a reciprocal participation of 15% more non-voting in Renault.

The Renault action lost 3% to 1405 GMT, after falling more than 8% on Monday. Nissan shares fell another 5.5 percent, while Mitsubishi Motors, the third largest member of the alliance, lost nearly 7 percent.

Mitsubishi Motors CEO Osamu Masuko said it might be difficult to manage the alliance without the unifying figure of Ghosn.

"I do not think anyone on Earth, like Ghosn, could run Renault, Nissan and Mitsubishi," he told reporters in Tokyo.

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

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 business daily Nikkei, citing unidentified sources, said Ghosn had received a stock price compensation of around 4 billion yen ($ 36 million) over a five-year period ending in March 2015, without this being mentioned in Nissan's financial reports.

The financial reports also do not mention the annual compensation of 100 to 150 million yen that Ghosn received from foreign subsidiaries of the automaker, the newspaper added.

Nissan declined to comment on the report.

The Japanese public broadcaster NHK also reported that Nissan had paid billions of yen to buy and renovate 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.

A French diplomatic source said the country's ambassador in Tokyo saw Ghosn on Tuesday as part of the usual procedures for a French citizen detained in Japan.

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.