Renault keeps Carlos Ghosn at helm despite financial misconduct charges

Company says all payments to Ghosn between 2015 and 2018 were compliant with the law

The French carmaker Renault has retained Carlos Ghosn as its chairman and chief executive after finding no irregularities in his pay packages, despite his arrest and continued detention in Japan.

Renault said on Thursday that its board had reviewed payments to Ghosn between 2015 and 2018. All payments were “in compliance with applicable law” as well as the French corporate governance code, it said.

Last month Ghosn was sacked as the chair of Nissan, which operates in a tripartite alliance with Renault and Mitsubishi, after he was arrested on suspicion of underreporting his income and misusing company funds.

After weeks of questioning, Ghosn was this week charged by prosecutors in Toyko with underreporting his income in regulatory filings by 5bn yen (£34.8m) between 2010 and 2015. Prosecutors also served him with a new warrant alleging he also underreported his income over the past three years, allowing them to extend his detention under Japanese law.

However, Renault announced on Friday that Ghosn would stay in his role. Its board made the decision after reviewing a report by its lawyers on a presentation made by Nissan’s legal team.

There had been tension between Renault and Nissan over Ghosn’s future because the French carmaker believed it had not had access to details of accusations against him. Both Renault and the French government, which owns a 15% stake in the carmaker, wanted to see further evidence before deciding their next steps.

Renault also said it had not yet received any information on Ghosn’s defence against the charges in Japan.

Ghosn, 64, who was born in Brazil to Lebanese parents before studying in France, was widely seen as one of the most powerful figures in the global auto industry. He gained a reputation as a ruthless but effective cost-cutter when turning around Renault and then Nissan.

The feud has threatened to split the alliance between Renault, Nissan and Mitsubishi, a group that ranks among the world’s top three car manufacturers.

Nissan and Mitsubishi rapidly moved to oust Ghosn as chairman within days of his arrest, but Renault has held firm, requesting evidence of wrongdoing. It has appointed Thierry Bolloré as its deputy chief executive to lead Renault while Ghosn is “temporarily incapacitated”.

Hiroto Saikawa, Nissan’s chief executive, had previously called for a change in the balance of power within the alliance with Renault. Renault currently owns 43.4% of Nissan’s shares, while Nissan owns 15% of Renault and 34% of Mitsubishi.

In addition to charges against Ghosn and a former Nissan director, Greg Kelly, prosecutors have also indicted Nissan itself, as the company submitted the official documents that underreported the income.

Ghosn has reportedly told visitors he is being treated well, but has complained about a cold cell and the rice-based food.

If found guilty, he could face a 10-year prison sentence

Another front opened in the legal battle this week when Nissan sued Ghosn’s sister in a Rio de Janeiro court for “unjust enrichment” in relation to a beachfront property in Brazil, according to judicial records cited by Reuters. The carmaker did not respond to requests for comment.


Jasper Jolly

The GuardianTramp

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