Renault’s board will probably meet in coming days to replace car titan

By BLOOMBERG

PARIS • Carlos Ghosn is looking increasingly isolated in his Tokyo cell, where the fallen car executive has languished for the better part of two months amid dimming prospects of a release any time soon.

Groupe Renault said yesterday that it’s seeking a change in governance after French Finance Minister Bruno Le Maire called for one that is “new and durable”, a signal from the carmaker’s most powerful shareholder that Ghosn’s last line of defence, the French government, has fallen.

It’s a reversal for the government, which had shown restraint until now to call for Ghosn’s head, saying he should be presumed innocent until proven otherwise. But as Ghosn’s chances of a release from detention anytime soon become increasingly unlikely, the realisation has set in at Renault’s biggest and most important shareholder that the company needs to move on from Ghosn, the figurehead of the carmaker and the Renault-Nissan alliance for years.

Renault’s acting chairman and lead independent director, Philippe Lagayette, and Patrick Thomas, who heads governance committee, said in a statement that Renault is actively working to find a solution for its future governance.

For now, the company will continue to operate under its existing set-up, Renault said.

French officials — among them Renault board member Martin Vial — arrived in Tokyo to discuss the future of Renault’s partnership with Nissan Motor Co Ltd, in which it is the largest investor after bailing out the Japanese company in the early 2000s.

Vial, who heads the agency that oversees French state shareholdings, was scheduled to meet yesterday night with Nissan CEO Hiroto Saikawa, Nikkei newspaper reported.

The French state had previously refused to follow partners Nissan and Mitsubishi Motor Corp in sacking Ghosn shortly after he was detained on Nov 19.

France was caught unawares when Japanese prosecutors acted on allegations of Ghosn’s financial misconduct over years at Nissan. The executive has said he’s innocent and has called the accusations “meritless and unsubstantiated”.

While the unexpected turn of events has created a climate of suspicion between the companies, Renault’s new focus on a post-Ghosn reality may help relieve some of the tension.

Renault’s board will probably meet in coming days to replace him, people familiar with the matter said earlier, asking not be identified because the information isn’t public. The board was spurred into action by Ghosn’s failure this week to win bail, which points to a lengthy incarceration and would prevent him from carrying out his roles at Renault, they said.

Ghosn lost an appeal yesterday of the latest bail rejection. His lawyers said they plan a further appeal to Japan’s Supreme Court. They have previously acknowledged that he may stay in custody until his trial, which could be six months away.

Ghosn has been indicted for understating his income at Nissan by tens of millions of dollars and transferring personal trading losses to the carmaker. Nissan has also accused Ghosn of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract.

The French delegation in Japan also includes Emmanuel Moulin, Le Maire’s chief of staff, according to a ministry spokesman. The state’s priority is to defend the “stability” of the partnership and the jobs it provides, government spokesman Benjamin Griveaux said earlier in Paris.

Renault and the French state had cited the principle of presumed innocence in backing Ghosn, while Nissan and smaller alliance partner Mitsubishi removed him as chairman.

Accusations against Ghosn mounted this week, including a reported €7 million (RM32.9 million) payment from a Dutch entity named NMBV that is part of the manufacturing partnership he assembled between the three carmakers.

The state has called for a Renault board meeting in the next few days, Le Maire said.

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 told Bloomberg.

Le Maire, asked about Senard in the TV interview, described him as a “great industrial manager”.