PARIS/TOKYO — In a move to steady the company after Carlos Ghosn’s arrest, Renault on Tuesday, November 21, 2018, named interim leaders while stopping short of removing him immediately as chairman and chief executive officer.
Thierry Bollore, who had been Ghosn’s operational second-in-command, was appointed deputy chief executive. Philippe Lagayette, Renault’s lead independent director, was chosen to serve as interim chairman after a board meeting late on Tuesday.
The board said Ghosn remained in place for the moment while it waited for more detail on the allegations. Renault said: “Mr. Ghosn, temporarily incapacitated, remains Chairman and Chief Executive Officer,” adding that the board would meet regularly under the lead independent director.
Ghosn was arrested on Monday after Nissan accused him of years of wrongdoing, including personal use of company money and under-reported earnings. Nissan said it planned to remove him as chairman on Thursday.
France, Renault’s biggest shareholder, had already begun pushing for interim leadership before the board met. Finance Minister Bruno Le Maire said earlier in the day: “Carlos Ghosn is no longer in a position where he is capable of leading Renault,” and added, “Renault has been weakened, which makes it all the more necessary to act quickly.”
Those remarks echoed concerns from President Emmanuel Macron, who had raised questions about the future of the alliance within hours of Ghosn’s arrest on Monday. After talks between Le Maire and Japanese Economy Minister Hiroshige Seko on Tuesday, the two sides said they shared a wish to keep the cooperation intact.
At the same time, the dispute appeared to widen. Three people with knowledge of the matter told Reuters that Nissan had informed Renault it also had evidence of possible wrongdoing at Renault-Nissan BV, the Dutch venture that oversees alliance operations under Renault’s control. The private communication came from Nissan Chief Executive Hiroto Saikawa.
Nissan owns 43.4 percent of Renault, while Renault holds a 15 percent non-voting stake in Nissan. The arrangement, built by Ghosn over almost two decades, turned Nissan from a company close to bankruptcy in 1999 into a major force in the global auto industry.
Renault said it was relying on the alliance charter’s “principles of transparency, trust and mutual respect” and demanded that Nissan provide “all information in (its) possession arising from the internal investigation.”
The market reaction was immediate. Renault shares closed 1.2 percent lower before the board meeting, after falling more than 8 percent on Monday. Nissan dropped another 5.5 percent, while Mitsubishi Motors Corp, the third member of the alliance, ended nearly 7 percent lower.
Mitsubishi Motors chief executive Osamu Masuko said the partnership could be difficult to manage without Ghosn. “I don’t think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi,” he told reporters in Tokyo.
Analysts also turned cautious. Bank of America Merrill Lynch cut Renault to “neutral” from “buy,” while Exane BNP Paribas lowered its view to “neutral” from “outperform.”
The crisis has raised broader questions about governance inside the alliance, where Ghosn had held unusually broad authority as chairman of all three boards. It also comes as the auto industry faces tighter emissions rules, falling diesel sales and heavy spending on electric and self-driving technology.
Japanese media continued to add to the allegations. Nikkei, citing unidentified sources, reported that Ghosn received share price-linked compensation of about 4 billion yen ($36 million) over five years to March 2015, but that it was not disclosed in Nissan’s financial reports. The paper also said annual compensation of 100 million to 150 million yen from overseas subsidiaries was left out of the filings.
Nissan declined to comment on that report. NHK separately said Nissan had spent billions of yen buying and renovating homes for Ghosn in Rio de Janeiro, Beirut, Paris and Amsterdam, citing unnamed sources. The broadcaster said the properties had no business purpose and were not listed as benefits in compensation filings to the Tokyo bourse.
There has been no comment from Ghosn on the allegations, and Reuters said it could not reach him for comment. A French diplomatic source said the country’s ambassador in Tokyo had seen him on Tuesday as part of normal procedures for a French citizen being held in Japan.
The exchange rate cited in the report was $1 = 112.4400 yen.
