Renault laying plan to remove Carlos Ghosn

Bloomberg

Carlos Ghosn is on the verge of losing his final fingerhold on power within the world’s biggest car-making alliance, with Renault SA said to be laying plans to remove him as chairman and chief executive officer.
Two months after Ghosn’s shock arrest for alleged financial crimes in Tokyo, the French carmaker’s board will probably meet in the coming days to replace him, according to people familiar with the matter.
Renault directors were spurred into action by Ghosn’s failure this week to win bail, pointing to a lengthy incarceration, said the people, who asked not be named because the information isn’t public.
Accusations against Ghosn have mounted this week, including an alleged 7 million-euro payment ($8 million) from an entity named NMBV that is part of the manufacturing partnership he assembled between Renault, Nissan Motor Co and Mitsubishi Motors Corp. Ghosn was removed by the two Japanese carmakers following his initial arrest on November 19 and an ouster from the leadership of Renault would cement a spectacular downfall.
Ditching the former industry titan would be Renault’s most significant response to the crisis — and a U-turn of sorts. In contrast to its Japanese partners, Renault and its most important shareholder, the French government, have so far backed him, citing the principle of presumed innocence.
Ghosn is accused by prosecutors of understating his income at Nissan by tens of millions of dollars and of transferring personal trading losses to the carmaker. The executive has said he’s innocent and has called the accusations “merit-less and unsubstantiated.”
Some Renault board members have concluded that a decision on Ghosn’s position is needed fast, one of the people familiar with the matter said. There’s no way Ghosn can stay in charge of Renault, no matter how the legal saga ends, the person said.
“Renault must realise Ghosn had stepped beyond what is appropriate,” said Janet Lewis, a Tokyo-based auto analyst with Macquarie Group. “Too much power would appear to have accrued to one person, so it is important to try and develop a leadership team that can continue the work of the Alliance.”
Spokesmen for Renault and for the French government declined to comment on any possible changes in governance at the carmaker.
A spokesman for Nissan reiterated the company’s internal investigation uncovered “substantial and convincing evidence of misconduct,” resulting in a decision to dismiss Ghosn as representative director.
The spokesman declined to comment on managerial decisions at Renault. Ghosn’s lawyers, represented by Motonari Otsuru, had no comment.
According to a person familiar with the investigation, a probe by Nissan and Mitsubishi uncovered a 7.04 million-euro payment to Ghosn in 2018 from a jointly owned, Amsterdam-incorporated venture named NMBV. Ghosn had struck an employment agreement with NMBV that year and had set his own salary, without discussing it with the other two directors of the entity, the person said. NMBV was funded through cost savings carved out by Nissan and Mitsubishi, according to the person.
Whatever the merits of the allegations against Ghosn, Renault’s need for a permanent replacement reflects at least one reality: He can’t run Renault from a small jail cell in Tokyo, where his spartan confinement is already taking a physical toll. He appeared in court last week thinner and grayer and days later developed a fever.
Renault’s board meeting may take place this weekend, according to Les Echos newspaper.