Ghosn ends his two-decade reign with the support of Renault at the last minute

YOKOHAMA, Japan / PARIS (Reuters) – The Nissan group (7201.T) The council voted unanimously to oust President Carlos Ghosn following charges of financial misconduct, after the French partner Renault (RENA.PA) withdrew from the last minute request to postpone the decision on the fate of their alliance leader.

The vote – supported by Renault representatives on Nissan's board after a four-hour meeting – could begin to defuse a crisis that threatened to break the alliance and provoke a diplomatic break between Japan and France, the main cause shareholder of Renault.

He also drew a firm line under Ghosn's management of the automobile empire that was the work of his life. Ghosn was arrested Monday in Japan after a Nissan investigation revealed evidence of serious wrongdoing, including an under-reporting of his compensation and personal use of the company's assets.

"The board recognized the importance of the issue and confirmed that the long-standing partnership with Renault remained unchanged," said the Japanese automaker.

Nissan said its board of directors had dismissed Ghosn and his co-director of representation, Greg Kelly, an alleged conspiracy, "after reviewing a detailed report of the internal investigation" – the first time that Renault had become aware of the main conclusions.

While Ghosn and Kelly are still in detention, neither man has been able to publicly defend himself against the allegations.

ULTIMATUM

Before the meeting, two directors of Renault's board had demanded the postponement of the vote on the dismissal of Mr Ghosn until the internal investigation and the judicial procedure are completed, told Reuters sources close to the folder.

Otherwise, they warned that the French manufacturer would exercise its right, under the umbrella agreement of the alliance, to appoint the successor of Ghosn and a fourth Renault candidate to the Nissan board, have indicated sources.

The ultimatum was firmly launched in its response to Hiroto Saikawa, CEO of Nissan, who had informed Renault in a previous confidential letter that Nissan's investigation was being expanded to include finance. of Renault-Nissan.

Nissan is 43.4% owned by Renault. Although his sales have increased by nearly 60%, he remains the junior partner in their hierarchy of shareholders with a lower reciprocal participation of 15% without voting rights in his French parent company.

Ghosn had been exploring a deeper rapprochement between Renault and Nissan that the Japanese manufacturer had resisted – a fact that fueled speculation on the ulterior motives of his arrest.

NO CONSPIRACY?

After the presentation of the council and its summary of the conclusions, however, the melody in Paris had changed.

"The accusations are extreme, certainly, but they are also accurate," said an official of the office of French President Emmanuel Macron at the Elysee.

"We know that there is a flourishing conspiracy theory about all of this, but it's really not our way of thinking."

After heavy losses at the start of the week, the Renault stock was up 0.5% at 16.15 GMT. Nissan shares closed up 0.8%.

The Japanese company has not announced a replacement for Mr Ghosn – confusing information that Saikawa would be appointed interim president.

Japanese prosecutors said Ghosn and Kelly had conspired to underestimate Ghosn's compensation of about half of the 10 billion yen ($ 88 million) that he had earned at Nissan in five years from 2010.

Following an internal investigation resulting from a whistleblowing alert, Ghosn is also accused of having diverted assets from Nissan and "having distorted the reason for being »Business investments.

A Nissan official with direct knowledge of the board meeting said Renault officials initially expressed their misunderstanding over the charges.

"There have been discussions and frustration over an unjust arrest," he said. "But they suddenly changed when they heard the content – and understood that it was not a strange conspiracy."

GHOSNLEAKS

Japanese newspapers have been inundated with details revealed from the Tokyo prosecutor's investigation of Ghosn. Asahi Shimbun reported Thursday that he had sent Kelly orders to make false statements about his pay.

Japan's largest-circulation daily, Yomiuri, said Nissan has been paying $ 100,000 a year to Ghosn's older sister since 2002 for a nonexistent advisory role. She lived in a luxury apartment in Rio de Janeiro funded by a Nissan subsidiary, according to the report, which cites unidentified sources.

Mitsubishi Motors, which joined the alliance in 2016, also plans to overthrow Ghosn as president next week. Renault's board appointed interim replacements on Tuesday, but left Ghosn as president and chief executive officer, with support from the government.

This position can now change.

Even though he was whitewashed, now recognize the French authorities, Ghosn would be an unlikely character to rebuild the intercultural trust of which he seemed to be the sole guarantor.

"There really seemed to be a common vision between Ghosn and Nissan," said the head of the Elysee. "But now we realize that there was in fact a gaping chasm."