Thursday , August 11 2022

France asks Renault to expel Ghosn


The storm triggered by the global car industry by the arrest of Renault's chief executive Carlos Ghosn worsened on Tuesday when the French finance minister asked for an interim leadership to assume the role of the auto manufacturer by his boss in shame.

Even when the Renault administration expressed "absolute support" to its CEO, Bruno Le Maire, he said that Ghosn could no longer lead the group after his arrest for malpractice charges at his Japanese partner Nissan.

He said he would ask an interim administration to immediately take over Renault. The French state owns 15% of the carmaker.

Arrested on Ghosn, after an Nissan internal investigation, he discovered what the Japanese manufacturer described as "significant misconduct," including cheating investors about the size of their salary and misusing the company's assets for your personal benefit.

Ghosn, one of the most powerful figures in the industry, is the president of Nissan, Renault and Mitsubishi as part of a tripartite alliance among the companies that the executive has developed.

Renault's board of directors met last night to decide whether to reject Ghosn. Before the meeting, Renault's chief executives offered Ghosn "full support".

In a note sent to employees at the end of Monday, Renault's operations manager, Thierry Bolloré, said the alliance with Nissan and Mitsubishi was "an industrial jewel that should be protected and encouraged."

He wrote: "Of course, we will make a strict follow-up of the situation and, as you will understand, it is not our place to comment at this stage. We want to mention in this regard our full support to our President and CEO."

Nissan shares fell Tuesday, the first day of operations in Japan, after the allegations were made public, with a 5.5 percent drop and the Japanese market in general. Mitsubishi Motors recorded a 6.9% drop. Renault shares fell 2.7% in European operations.

In a note addressed to clients Tuesday morning, Deutsche Bank analysts said they believe there is a "high probability" that Ghosn will lose leadership in all three of the alliance's partners.

Le Maire stressed that the French government "did not require Ghosn's official departure from the board of directors," and said Paris has so far not seen "evidence" of any bad practice.

Le Maire said that Bolloré, who also acts as Ghosn's deputy, is a candidate to take over Renault. Bolloré, earlier this year, assumed much of Renault's operational responsibility.

"We currently have a deputy executive director, Mr. Thierry Bolloré, who has a very good quality. We will see what the board of directors decides, but we need to place an interim leadership as quickly as possible," Le Maire said.

Deutsche Bank said Ghosn gave up most of Nissan, Renault and Mitsubishi's daily operations: "We think there are directors with a high reputation to lead the company, we do not worry about the health of operations."

Ghosn, who is credited with rescuing the Japanese firm from bankruptcy, is expected to be dismissed as Nissan president at a board meeting on Thursday.

Nissan has not launched Ghosn's location, which was arrested Monday after landing at Haneda Airport in Tokyo on a private plane.

The Japanese group said that in its internal investigation, which took place after the accusation of a whistleblower, it was discovered that Ghosn had presented a lower salary for a few years, which would constitute a violation of the Financial Instruments Act and exchange. Japan.

According to the Tokyo Prosecutor's Office, Ghosn earned about 10 billion yen ($ 88.7 million) for five years until March 2015, but only half reported this. If he is found guilty, he may face up to 10 years in prison, a fine of up to 10 million yen, or both.

The Japanese media quoted anonymous people close to the investigation Tuesday who said that Ghosn used a series of homes in Brazil, the Netherlands and elsewhere, located in places that had nothing or nothing to do with the operation . from Nissan.

Ghosn could not be contacted for comments. However, some analysts and investors have stated in the Financial Times that Nissan's suggestion that Ghosn planned his alleged misconduct without extensive internal co-operation was unlikely. They also raised questions as to why the company had requested an internal investigation to find out how much it paid its CEO.

Few analysts question Ghosn's achievements in returning Nissan in the early 2000s. However, in recent years his record has come under increased control because the balance of power between Nissan and Renault has been reversed. , the company's profitability in the US – the largest market – has deteriorated and has been affected by scandals through vehicle inspections and fake fuel savings data.

We're looking for an irreversible merger

Carlos Ghosn had planned a merger between Renault and Nissan before his arrest in Tokyo this week, an agreement that was opposed by the Japanese carmaker's council and looking for ways to block

Several members of the Nissan Board have been waiting for an offer to materialize in the coming months, according to a person close to the board. Another source said a merger could take place "in a few months", and a third said it was actively considered. The merger would make the alliance irreversible.

Hold the expulsion

Nissan calls for expulsion of Carlos Ghosn from the car maker after accusing him of cheating investors about the size of his salary and the misuse of his company's personal gains, which marked a sudden fall of one of the largest coveted from the automotive industry. "I have a strong sense of indignation and despair," Hiroto Saikawa, chief executive of Nissan, told a news conference she called at Yokohama's headquarters.

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