Renault to replace Carlos Ghosn after arrest in Japan

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Carlos Ghosn should not remain in charge of Renault after his arrest in Japan for "misconduct", said the French Minister of Finance.

Bruno Le Mayor said that Mr Ghosn was "no longer in a position" to lead the automaker in which the French state holds a 15% stake.

Renault's board of directors is expected to meet on Tuesday to discuss the temporary replacement of Ghosn as managing director.

Renault shares again lost 4% on Tuesday after falling 8% on Monday.

Renault's partnership with Nissan remains in the interest of France and Japan, as well as the two companies, added Le Mayor.

• Carlos Ghosn: The motivated "cost killer"
• The corporate scandals that shook Japan

Ghosn leads an alliance of the two automakers as well as Mitsubishi Motors.

On Monday, Japanese prosecutors said Ghosn had under-reported his income from his five-year yen ($ 44.4 million) position at Nissan over five years.

According to the Japanese television channel NHK, Ghosn has spent millions of dollars buying luxury homes.

Nissan and Mitsubishi are both preparing to dismiss him. The shares of the companies decreased by 5.5% and 6.8% respectively in Tokyo.

What has happened so far?

At a press conference held on Monday, Nissan said an internal investigation by an alerting launcher had revealed "serious wrongdoing" including "personal use of property". 39; company. "

The announcement caused a shock wave in the auto industry, where 64-year-old Ghosn is perceived as a titan, responsible for Nissan's dramatic turnaround in the early 2000s.

Hiroto Saikawa, CEO of Nissan, said: "Too much power has been granted to a person in terms of governance," speaking at the company's headquarters in Yokohama.

"I must say that it's a dark side of the Ghosn era that has lasted a long time," Hiroto said, adding that he was still pondering whether Mr. Ghosn was "a character." charismatic or a tyrant ".

What are the charges?

Prosecutors later said in a statement that Ghosn and his chief executive, Greg Kelly, had plotted to underestimate Ghosn's compensation, starting in 2010.

Mr. Ghosn is charged with filing annual securities reports containing false statements of up to 10 years in jail, or a fine of 10 million yen, or both.

Starting in 2010, Japanese companies are required to disclose the salaries of executives who earn more than 100 million yen.

Japanese prosecutors have also said they have already searched the Nissan headquarters in Yokohama, near Tokyo, as part of their investigation.

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BBC Tokyo correspondent Rupert Wingfield-Hayes said the charges against Ghosn had been revealed because of the new law that came into force in Japan in June, aimed at improving corporate governance and to expose the misdeeds of companies.

According to Japanese law, Mr. Ghosn can be held in detention for up to 23 days without charge.

No other details of his alleged fault have been given. But some details have been reported by the Japanese media.

The broadcaster NHK reported, according to anonymous sources, that Nissan had provided Ghosn with homes in four countries without legitimate commercial justification.

Millions of dollars have been spent on buying and renovating homes in Brazil, Lebanon, France and the Netherlands, NHK said.

Mr. Ghosn and Mr. Kelly did not comment.

What will be the impact on the Alliance?

As revelations of misconduct emerged, the future of the Ghosn-led automobile alliance remained unclear.

He was recognized for turning around Nissan and Renault before becoming the pivot of the alliance that the companies then formed.

The Renault-Nissan-Mitsubishi Alliance has sold 10.61 million passenger cars and light commercial vehicles in 2017, making it the largest automotive group in the world.

Nissan President Saikawa said the partnership "will not be affected by this event".

Janet Lewis, head of industrial research at Macquarie Asia, said it was "in the interest of the three companies to overcome this because there were not many alternatives for them, especially in light of the investments they have made together so far ".

Five notable scandals in Japan Inc

• The Olympus case: Michael Woodford has denounced extensive accounting fraud to the camera firm
• The irregular accounting of Toshiba: the industrial group revealed that it had overvalued its operating profit by nearly $ 1.2 billion
• Takata's deadly airbags: the defective airbags produced by the company have resulted in injuries and deaths around the world
• Kobe Steel Data Scandal: the third largest steelmaker in the country falsified data on the quality of some of its products
• Nissan emissions failed: the automaker has admitted some emissions and testing "away from the prescribed test environment".

The corporate scandals that shook Japan