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Renault board is said ready to oust Ghosn as chairperson, CEO

16th January 2019

By: Bloomberg

  

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Renault SA is preparing to replace jailed chairperson and CEO Carlos Ghosn after his failed bid for bail in Japan signaled he may remain in detention for months, people familiar with the matter said.

Some Renault board members have concluded that a decision is needed fast, after reports that Ghosn received payment from a structure named Nissan-Mitsubishi, one of the people said, asking not to be identified because the matter isn’t public. Regardless of the outcome of legal cases, Ghosn can’t possibly stay at the helm of the French carmaker, the people said.

Renault directors will probably meet in the coming days, they said, while Les Echos reported a board meeting may take place by Sunday. Interim CEO Thierry Bollore’s mandate could be made more permanent, while Michelin CEO Jean-Dominique Senard, is the leading candidate to become chairman, one of the people said.

ALLIANCE’S FUTURE
Nissan Motor has already ousted Ghosn as chairperson, and CEO Hiroto Saikawa has told French media that Renault would reach the same conclusion if it had access to all relevant information. While the Japanese CEO brushed off speculation that the probe was a ruse to overthrow Ghosn or push France out of the alliance – a theory he called “absurd” – replacing Ghosn could pave the way for Renault and Nissan to negotiate a future that’s less dependent on one leader.

“Both companies need the alliance,” said Janet Lewis, a Tokyo-based auto analyst with Macquarie Group. “Negotiating the future of the alliance needs to be done by people with the authority to do so, not acting representatives.”

INTERNAL PROBE
Spokespersons for Renault and for the French government, Renault’s most important shareholder, declined to comment on any governance change. 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 spokesperson declined to comment on managerial decisions at its partner Renault.

Ghosn, 64, has been detained in Japan since November 19 over accusations of financial crimes. As well as Nissan, Renault alliance partner Mitsubishi Motors Corp. has also dismissed him as chairperson. Renault has so far refrained from ousting him, citing the presumption of innocence and the need to study the evidence gathered.

While Ghosn formally remains chairperson and CEO at Renault and the Renault-Nissan-Mitsubishi alliance, the French company opted for interim management, with lead director Philippe Lagayette as acting chairperson.

The new governance could be appointed on a temporary basis until approved at a shareholder meeting, the people said.

On Monday, the French finance minister Bruno Le Maire reiterated the need to respect the presumption of innocence and said Ghosn would remain until it’s clear that he won’t return to work for a while. Asked about who could replace him, he said that France had done "all due diligences."

Renault lawyers have been briefed by Nissan’s legal team, but the French carmaker’s board hasn’t reviewed the allegations.

“Until the trial is completed, the Ghosn saga will be with us,” said Lewis. “But hopefully Nissan and Renault can sort out their issues and move forward along with Mitsubishi to pursue the longer-term goals of the alliance.”

Edited by Bloomberg

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