By on December 13, 2018

Carlos Ghosn

Two automakers, two investigations, and two very different outcomes for one man.

Renault’s board of directors met in France today, deciding that CEO and chairman Carlos Ghosn should stay on in his current role in the wake of an internal investigation that members say showed no signs of criminality. Meanwhile, Ghosn sits in a Tokyo jail, indicted on charges of financial misconduct at Renault’s alliance partner, Nissan.

Away from the Paris streets, it seems everything’s hunky dory in France.

While the Renault probe turned up no illegality in regards to Ghosn’s finances on the French side of alliance, Nissan’s internal investigation turned up enough evidence to prompt the former Nissan chairman’s arrest. The Japanese automaker’s board voted to drop Ghosn after that country’s authorities nabbed Ghosn in Tokyo on Nov. 19.

In a media release, Renault stated:

As part of the agenda, Claude Baland, Senior Advisor in charge of Ethics and Compliance, and Eric Le Grand Chief Ethics and Compliance Officer, presented to the Board of Directors of Groupe Renault the current status of the review concerning the compensation of the Chairman and Chief Executive Officer of Renault for the years 2015-2018 which was undertaken on November 23, 2018. Their preliminary conclusion is that the compensation of the Chairman and Chief Executive Officer of Renault and the conditions under which such compensation was approved were in compliance with applicable law as well as the recommendations of the AFEP-MEDEF.

Japan, as well as Nissan, accuses Ghosn and board member John Kelly (since dropped from its ranks) of under-reporting Ghosn’s income by nearly $80 million between 2010 and  2017. The Japanese indictment, handed down earlier this week, pertains to the 2010-2014 period. Ghosn denies he hid income in statements to Japan’s finance ministry; rather, through his lawyer he claims the compensation was deferred income, to be paid out after his departure. It wasn’t necessary to reveal this income at the time, he claims, though Japan will have the last word on that.

Just yesterday, it was revealed that Nisan received approval to hand over the results of its investigation to Renault. The board has still not had an opportunity to question Ghosn.

“We believe we need to wait on what Carlos Ghosn has to say about this one-sided investigation,” a person familiar with the board meeting told the Wall Street Journal.

In its statement, Renault said, “The Board of Directors requested that Renault’s lawyers continue their review and assessment of the information provided, in liaison with Nissan’s lawyers, and promptly provide the Board with a new update on the situation.”

In addition to reviewing the Nissan dossier, Renault will continue probing financial reports going further back in time. For now, the relationship between the two intertwined automakers remains strained.

[Image: Nissan]

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13 Comments on “Renault Keeps Ghosn as Chairman and CEO As Probe Reveals No Wrongdoing...”

  • avatar

    This is still kind of smelly. Nissan and Mitsubishi have obviously made the decision to throw him under the bus, waiting on the Board members to show up on TV and publicly bow down as low as possible without falling over to make it right with Japanese society.

    Yet, Renault can’t find anything. Are Nissan and Mitsu throwing him on the sword for reasons yet unknown? Nissan was bragging about their “Solid Oxide Fuel Cell” concept in 2016, Mitsubishi has some fuel-cell prototypes running around, Nissan sold their battery plant in TN last year, I don’t even want to run with the conspiracy theory that Ghosn actually had Nissan on the path to bringing an reasonable EV to market with the Long Range battery Leaf. They wiped all of the public announcements of that vehicle as soon as Ghosn was under lock and key.

    I guess the guy’s just a thief and the Japanese automakers have better accountants – perhaps the Renault accounting staff can’t get to their offices because of the yellow-vest protests. If Macron had his way, the Frenchmen in the country would simply ride a Lime scooter to the local train station and try and navigate their way home with the groceries. That will make for some awesome YouTube videos.

    So many in the EV community were awaiting the release of the Long-Range Leaf, and it’s just weird if you have a significant customer base ready to put their money down, all of the sudden, ah, well, “we’re not quite ready to deliver that just yet”.

    This is just weird. If the dude did the crime, well then do the time. Why would Renault see it completely different? Did he decide that he only needed to steal from the Japanese companies?

    • 0 avatar

      Ghosn may not have stolen anything. The tax treatment of deferred income in Japan and France may be entirely different. It’s hard to understand how the discrepancy could have gone so long without somebody noticing, or knowing how it works in the first place.

      On the other hand, there could have been some internal intrigue going on, and the charges could very well be a ruse by people with Nissan and Mitsubishi to force Ghosn out. A guy who wields so much authority can make a lot of enemies, especially if he has as much audacity as Ghosn has displayed.

      I’m leaning toward a power struggle inside Nissan and/or Mitsubishi, one that resulted in enough people in Japan coming together with the government to oust Ghosn on arcane tax charges. There will have to be insider revelations to prove that, but the fact Renault isn’t playing along is interesting in itself, since the French government is involved.

      • 0 avatar

        I agree with your comments.

        Renault owns 43% of Nissan. The French government owns 15% of Renault, same as the 15% Nissan holds but which are non-voting shares. Renault/Ghosn already got the French government to mind its own business a year ago when they tried to pull off a power move, because 15% ownership doesn’t swing the board votes.

        OTOH, Renault owning 43% of Nissan is a different matter entirely. If this is an attempted palace coup and the Renault legal team doesn’t buy the report handed them by Nissan lawyers in Paris earlier this week, Nissan stands to go through a rough patch of retaliation. Easy to derail banker loans. Note that the Japanese had to travel to Paris, not Renault lawyers traipsing to Tokyo. Tells you who has the power right there.

        • 0 avatar


          “Tells you who has the power right there.” that makes a lot of sense. +1

        • 0 avatar

          @condurum, I too have been subjected to dismissal from a Japanese company when I wouldn’t generate a forward-looking sales report that showed a profit. They kept asking me to revise it to show a profit.

          I made a bunch of $$, but I’ll be damned if I was going to report something that wasn’t going to happen. I didn’t have the products in the pipeline that I thought would make us profitable, so I didn’t give them the chance to fire me, I resigned.

  • avatar
    schmitt trigger

    With the Macron government’s hands full with the Gilets Jaunes movement, I doubt that they have had the time or stomach to weather yet another problem.

  • avatar
    johnny ringo

    It appears to me there is a behind the scene power play going on between Nissan, Mitsuibishi and Renault, the Japanese companies have grown tired of being treated as junior partners in this arrangement and do not like being controlled by a foreigner like Ghosn. Typically Japanese executies make far less than their western counterparts. Ousting Ghosn on arcare tax charges could be a way to get rid of him.

    • 0 avatar

      Typically Japanese executives REPORT far less income than their western counterparts. What Ghosn did may very well have been par for the course in Japan. It may have also been a tool in the power play you speak of.

  • avatar
    SCE to AUX

    If the Renault people truly think there is nothing to see here, then they should be hopping mad about Mr Ghosn’s detention, and should be seeking his release.

    Something’s fishy, and it’s hard to know where.

  • avatar

    I hope Mr. Ghosn beats the rap.

  • avatar

    Ghosn is guilty, he knew he was hiding his pay.

    Nissan is guilty, they turned a blind eye because he was successful.

    Now Renault’s about to seize control of the whole corporate structure and this is a desperate gambit by Nissan to remain independent.

    The Japanese government has a dog in the fight because if Ghosn goes free it legitimizes corporate sovereignty over national sovereignty.

    As much as I like what Ghosn did for Nissan, he needs to face the music for violating Japanese law, if that part is proven. The Nissan board also needs to face jail time for their complicity.

    Renault needs to go ahead and absorb Nissan and Mitsubishi.

    France and Japan need to defend their sovereignty through regulation and rule of law, even if the companies stocks go down for a bit.

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