France follows Nissan in ousting Renault CEO Ghosn after arrest in Japan for financial misconduct

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Thomson ReutersCarlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, is being ousted from his roles amid a misconduct allegations.
  • Nissan and Mitsubishi shares tumbled in Tokyo after chairman Carlos Ghosn was arrested and as Tokyo prosecutors said he reported only half of his $89 million in earnings.
  • French President Emmanuel Macron said the state would be “vigilant” in encouraging stability at Renault, while French ministers said they will push for interim governance. Nissan ousted him on Monday.
  • Ghosn could face up to 10 years in prison in Japan, a fine of up to ¥10 million, or both.
  • Follow the share prices of Renault, Nissan and Mitsubishi Motors at Markets Insider.

It’s all getting worse for Carlos Ghosn.

Prosecutors in Japan allege the Renault-Nissan-Mitsubishi Alliance chairman and CEO earned a salary of about ¥10 billion ($88.7 million) between 2011 and 2015, but reported only half of that. He was arrested Monday, and could face up to 10 years in prison, a fine of up to ¥10 million, or both.

Now, the highest members of the French government (France owns a whopping 15% stake in Renault) have piled on.

“The state as a shareholder will be extremely vigilant to the stability of the alliance and the group,” French President Emmanuel Macron said on Monday. France’s Finance Minister, Bruno Le Maire, told France Info that he would push for interim governance at the carmaker. Renault said executives would meet imminently to discuss the incident.

The debacle has called into question the future of the world’s biggest car alliance without the veteran executive at the helm. Investors have showed concern: After Renault shares reached a four-year low on Monday, Nissan and Mitsubishi Motors followed suit, tumbling in Tokyo trading. Renault fell for a second day, and is down 3.1% in Paris trading on Tuesday.

Renault-Nissan-Mitsubishi have had a strategic partnership since 1999 with Ghosn acting as chairman of all three companies as well as being CEO at Renault. It was a car-making powerhouse: the alliance sold more than 10.6 million cars in 2017, the most of any automaker in the world.

Brazil-born Ghosn, 64, was arrested in Tokyo following allegations of misconduct with claims that he underreported his salary with the help of fellow director Greg Kelly. Japanese broadcaster NHK also said Nissan paid tens of millions of dollars towards his residences in various global cities, while paying hundreds of thousands towards his family vacations.

Ghosn stepped down as CEO of Nissan in 2017. Renault’s shares, already battered by the US-China trade war, are down about 30% this year.

“Nissan deeply apologizes for causing great concern to our shareholders and stakeholders,” the company Monday.

Source: Business Insider

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