Renault board ready to oust Ghosn as chairman, CEO

By BLOOMBERG

PARIS • Carlos Ghosn is on the verge of losing his final tether to power, with Renault SA said to be laying plans to remove him as its leader almost two months after the car titan’s shock arrest rocked its alliance with Nissan Motor Co Ltd and Mitsubishi Motors Corp.

The French carmaker’s board will probably meet in the coming days to replace him as chairman and CEO, 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 payment (RM32.8 million) from an entity named RNBV that is part of the manufacturing partnership he assembled between Renault, Nissan and Mitsubishi.

Ghosn was removed by the two Japanese carmakers following his initial arrest on Nov 19 and an ouster from the leadership of Renault would cement a spectacular downfall.

Ditching the former industry leader would be Renault’s most significant response to the crisis — and a U-turn. 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.

That stance has now shifted. The head of the French agency that handles the state’s shareholdings Martin Vial, and the chief of staff of the French finance minister Emmanuel Moulin, were in Tokyo yesterday as part of a trip planned a few days ago to discuss Renault-Nissan alliance, a spokesman for the ministry said yesterday. Vial also sits on Renault’s board.

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 “meritless 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 Ltd.

“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.