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Home / Business / Nissan ends Ghosn's two-decade reign with the Renault at the last minute

Nissan ends Ghosn's two-decade reign with the Renault at the last minute



YOKOHAMA, Japan / PARIS (Reuters) – The Nissan Board of Directors ( 7201.T ) unanimously voted in favor of chairman Carlos Ghosn for suspected financial misconduct after French partner Renault ( RENA.PA ) to overthrow. ) withdrew at the last minute from the demand to postpone the decision on the fate of their Alliance Leader.

The vote – backed by Renault on the Nissan board after a four-hour meeting – could start to defuse a crisis that threatened to reinforce the alliance and unleash a diplomatic divide between Japan and France, the main shareholder of Renault.

It also drew a solid line under Ghosn's leadership of the auto empire, which was his life's work. Ghosn was arrested in Japan on Monday after a Nissan investigation revealed evidence of serious misconduct, including inadequate reporting of his compensation and personal use of corporate assets.

"The Board recognized the importance of the matter and confirmed that the long-standing partnership with Renault has remained unchanged," said the Japanese carmaker.

Nissan said his board has fired Ghosn and his deputy director Greg Kelly, an alleged co-conspirator, "after reviewing a detailed report on the internal investigation" ̵

1; for the first time Renault had seen decisive results.

With Ghosn and Kelly still in custody, no man could defend himself publicly against the allegations.

ULTIMATE

Prior to the meeting, two Renault directors had called for a postponement of the vote to shoot Ghosn until internal investigations and legal proceedings were completed, sources familiar with the matter told Reuters.

Otherwise, they would have warned that the French automaker would claim its right under the Covenant Agreement to appoint Ghosn's successor and a fourth Renault candidate to the Nissan board.

The ultimatum was issued in a strongly worded response to Nissan CEO Hiroto Saikawa, who told Renault in a previous confidential letter that the Nissan investigation would be extended to Renault-Nissan's finances.

Nissan is 43.4% owned by Renault. Although sales have risen by almost 60 percent, they remain the youngest partner in its shareholder hierarchy, with a 15 percent lower mutual share of voting rights in its French parent company.

Ghosn had investigated a deeper connection between Renault and Nissan, which defied the Japanese firm – a fact that fueled speculation about ulterior motives for his arrest.

A street monitor showing news of the arrest of Nissan chairman Carlos Ghosn will be shown next to Christmas lights on November 20, 2018 in Tokyo, Japan. REUTERS / Toru Hanai

NO CONSPIRACY?

After the board presentation and its summary of the results, however, the mood in Paris had changed.

"The accusations are certainly extreme, but they are also precise," said a representative of French President Emmanuel Macron at the Elysee Palace office.

"We know that there is a flourishing conspiracy theory here, but that's really not our thinking."

After heavy losses last week, Renault's stock rose 0.5 percent at 1615 GMT. The Nissan share closed 0.8 percent.

The Japanese company did not announce a replacement for Ghosn – confusing reports that Saikawa would be appointed provisional chairman.

Japanese prosecutors say Ghosn and Kelly have plotted to underestimate Ghosn's compensation by about half of the $ 10 billion ($ 88 million) earned by Nissan over the last five years.

Slideshow (15 Images)

Following Ghosn is an internal investigation resulting from a whistleblower warning. Furthermore, Ghosn is accused of abusing Nissan's assets and "misrepresenting" the purpose of corporate investments.

A Nissan executive with direct knowledge of the board meeting said the Renault representatives had initially expressed incomprehension about the allegations.

"There was some talk and frustration about an unjust arrest," he said. "But they changed suddenly when they heard the content – and understood that this was not a strange conspiracy."

GHOSNLEAKS

Japanese newspapers were flooded with the leaked details of the investigation by the Tokyo prosecutor in Ghosn. Asahi Shimbun said on Thursday that he had sent Kelly's instructions by e-mail to misrepresent his compensation.

Yomiuri, Japan's most widely used newspaper, said Nissan has paid Ghosn's older sister $ 100,000 a year since 2002 for a nonexistent advisory role. She lived in a luxury apartment in Rio de Janeiro, which was financed by a Nissan subsidiary. According to the report, unidentified sources were mentioned.

Mitsubishi Motors, who joined the alliance in 2016, plans to oust Ghosn as chairman next week. Renault's board appointed provisional deputies on Tuesday, but retained Ghosn as chairman and CEO with the support of the government.

This attitude can change now.

Even if he had clarified, French officials now admit that Ghosn would be unlikely to rebuild intercultural confidence, which he once seemed the sole guarantor.

"It really seemed that there was a shared vision between Ghosn and Nissan," said the Elysee representative. "But now we realize that there actually was a gaping gap."

Report by Sam Nussey in TOKYO, Maki Shiraki in YOKOHAMA and Laurence Frost in PARIS; Additional reports by Michel Rose, Daniel Leussink, Makiko Yamazaki, Chang Ran Kim, Kiyoshi Takenaka and Gilles Guillaume; Letter from Laurence Frost; Editing by Muralikumar Anantharaman and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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