France calls for Carlos Ghosn to go at Renault

Management expresses ‘full support’ for arrested chief executive

French finance minister Bruno Le Maire has called for Renault chief executive Carlos Ghosn to go.

French finance minister Bruno Le Maire has called for Renault chief executive Carlos Ghosn to go.

 

The turmoil in the global automotive industry over the arrest of Renault chief executive Carlos Ghosn deepened on Tuesday with France’s finance minster calling for interim management to take over the reins of the carmaker from its fallen boss.

Even as Renault’s management expressed “full support” for their chief executive, Bruno Le Maire said Mr Ghosn was no longer able to head the French carmaker following his arrest on accusations of misconduct at the company’s Japanese alliance partner Nissan.

He said he would ask for interim management to be put in place immediately at Renault. The French state owns 15 per cent of the carmaker.

Mr Ghosn was arrested following an internal investigation at Nissan that uncovered what the Japanese automaker called numerous “significant acts of misconduct”, including misleading investors about the size of his salary and misusing company assets for personal gain.

Powerful

Mr Ghosn, one of the most powerful figures in the auto industry, is chairman of Nissan, Renault and Mitsubishi as part of a three-way alliance between the companies built by the executive.

Renault’s board will meet on Tuesday evening to decide whether to remove Mr Ghosn. Ahead of the meeting, Renault’s most senior executives offered “full support” for Mr Ghosn.

In a note sent to employees late on Monday, Renault’s chief operating officer Thierry Bolloré, said the alliance with Nissan and Mitsubishi was an “industrial gem that must be protected and nurtured”.

He wrote: “We are of course closely monitoring the situation, and as you will understand it is not our place to comment at this stage. On your behalf, we would like to state here our full support for our chairman and CEO.”

Shares in Nissan fell on Tuesday, the first trading day in Japan since the allegations were made public, sliding 5.5 per cent and pulling down the broader Japanese market. Mitsubishi Motors was down 6.9 per cent. Renault shares were down 2.7 per cent in European trading.

In a note to clients on Tuesday morning, Deutsche Bank analysts said they believed there was a “high likelihood” that Mr Ghosn would lose his leadership roles at all three alliance partners.

Mr Le Maire emphasised that the French government has “not asked for the formal departure of Mr Ghosn from the board of directors”, saying Paris has thus far seen “no proof” of wrongdoing.

Responsibility

Mr Le Maire said Mr Bolloré, who also acts as Mr Ghosn’s deputy, was one candidate who could take the reins of Renault. Mr Bolloré earlier this year took on much of the operational responsibility of Renault.

“We have today a deputy CEO, Mr Thierry Bolloré, who is of great quality. We will see what the board decides, but we need to put in place as quickly as possible an interim leadership,” said Mr Le Maire.

Deutsche Bank noted that Mr Ghosn had ceded much of the day-to-day operations at Nissan, Renault and Mitsubishi: “We believe there are highly reputable managers who can run the company, we are not concerned about the health of operations.”

Mr Ghosn, who was credited with rescuing the Japanese carmaker from the brink of bankruptcy, is expected to be removed as Nissan chairman at a board meeting on Thursday.

Nissan has not disclosed the location of Mr Ghosn, who was arrested on Monday after landing at Tokyo’s Haneda airport in a private jet.

Mr Ghosn could not be reached for comment.

– Copyright The Financial Times Limited 2018