Wednesday , September 28 2022

Ghosn's arrest spreads disarray among Renault and Nissan executives



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Renault and Nissan's auto alliance are threatened with disqualification on a rift between the partners and their employees, Carlos Ghosn, remains in custody in Japan.

Executives of the Amsterdam-based alliance are scheduled to meet on Thursday in their first encounter since Mr Ghosn was arrested last week on allegations of understating his income and misusing Nissan's assets. According to the sources, Nissan chief executive Hiroto Saikawa and others may attend by video conference.

Mr Ghosn remains chairman of the partnership, which includes the small Mitsubishi Motors In his absence, one option is pushed by Nissan is to split the top job in the alliance, one of the sources said. But the French government, Renault's most important shareholder, is sticking to the principle that the car maker's chairman should lead the alliance, a view shared by officials at Renault, according to Bloomberg.

The leadership void stems from Mr Ghosn's outsize role atop the alliance. He engineered the partnership between the French and Japanese companies that has grown to challenge Volkswagen as the world's largest vehicle producer. Under the governance rules and a broad outline of the way it functions, decisions and recommendations "are always made by consensus between the two shareholders". This work when he headed all three partners, but in the last week he was removed as chairman of Nissan and Mitsubishi.

Nissan is said to be aiming to make the decision on who will succeed Mr Ghosn as the next board meeting on December 17. Nissan has said three external directors shall nominate a candidate from its board members remaining.

According to the Franco-Brazilian executive, Japan's national broadcaster, according to the two Japanese partners, has denied wrongdoing.

Nissan made annual records of the payment to a later date to Mr Ghosn. Tokyo prosecutors said that the amount of pay Mr Ghosn had received the time the records were made and therefore he was required to declare this deferred pay in securities reports, Japanese media said. Mr Ghosn told the prosecutors that former representative director Greg Kelly told him that the way he reported his remuneration was legal, the Asahi newspaper reported.

The turmoil atop the alliance comes at a critical moment, when the world around the car makers are struggling with a range of challenges, key markets in slowing sales to long-term technological changes that require huge investment. That's why analysts say it's necessary for the partners to sort out their differences or risk falling from rivals to Germany from Silicon Valley.

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Read more:

Ousted Nissan Chairman Carlos Ghosn 'arranged undisclosed retirement payout'

Ghosn must not be a victim of trial by popular opinion

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The complex dynamic between Nissan and Renault is further complicated by the removal of Mr Ghosn who, before his arrest, had planned to cement the collusion through a full merger of the companies, The National reported on Monday The move was resisted by Nissan chief executive Hiroto Saikawa, who is seeking more power for the Japanese side in the partnership, which he views as too skewed in favor of the French, media reported.

Nissan is aiming to redress perceived imbalances in the alliance by limiting the power of its French partner to nominate officials. The Japanese car maker does not expect the shareholding changes will be discussed at the meeting, although there will be discussions on who will be the chairman of the group. a source said.

French Finance Minister Bruno Le Maire on Sunday called the "indispensable" and said he wants to strengthen it while maintaining the existing cross-holding and governance rules – including one that requires Renault's chairman to serve in the same role as head of the alliance. Renault's board stopped short of ousting Mr Ghosn, instead of nominating deputy Thierry Bollore as interim CEO.

Renault has a 43 percent voting stake in Nissan, which in turn owns just 15 percent of Renault, with no voting rights.

It's clear that tension between the two car makers will render decision-making within the alliance tricky. While the French partner has the power to appoint the chairman, the vice chairman – currently Mr Saikawa – comes from Nissan. Spokesman for both companies declined to comment

Mitsubishi Motors CEO Osamu Masuko said on Monday, "I do not think one meeting will set everything around the future", adding that he would follow the meeting in Amsterdam via video conference to discuss its future.

A Daimler executive may also participate in the meeting The German car maker has stakes in both Renault and Nissan

The Franco-Japanese alliance started almost two decades ago, and in 2002 the partners formed Renault-Nissan, an equally-owned company incorporated under Dutch law that is responsible for the alliance's strategic management. Mitsubishi joined in 2016

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