Nissan shares evidence against Carlos Ghosn with Renault

Renault is facing a crunch decision over CEO Carlos Ghosn after Nissan shared details of an investigation th...

Posted: Dec 12, 2018 11:29 AM
Updated: Dec 12, 2018 11:29 AM

Renault is facing a crunch decision over CEO Carlos Ghosn after Nissan shared details of an investigation that led to his arrest and indictment in Japan.

Members of Nissan's legal team briefed lawyers for the French carmaker in Paris on Monday, the first exchange of information about the case between the partner companies since Ghosn was arrested in Tokyo on November 19, according to a source familiar with the matter.

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Ghosn's legal troubles have plunged the future of the alliance he forged between Renault (RNSDF) Nissan (NSANY) and Mitsubishi Motors (MMTOF) into doubt, and cost him the chairmanship of both Japanese carmakers.

Renault has so far taken a different approach, appointing interim management but keeping Ghosn in his positions as CEO and chairman. The company stated as recently as Monday that it had not seen details of the allegations against him.

Renault declined to comment Wednesday when asked about Monday's legal briefing.

Tokyo prosecutors on Monday indicted Ghosn, 64, on accusations he under-reported his income in Nissan corporate filings by about 5 billion yen ($44 million) between 2010 and 2015.

They also rearrested him on additional allegations that he also under-reported his income by more than 4.2 billion yen ($38 million) between 2015 and 2017. He will remain in police custody until at least December 20.

Japanese public broadcaster NHK reported Monday, citing unidentified sources, that Ghosn is denying the allegations against him.

Nissan said last month that an internal investigation discovered "significant" financial misconduct by Ghosn and Kelly following a whistleblower report.

"The evidence presented to Nissan's board last month was substantial and compelling enough to result in a unanimous vote. We believe any objective review of this evidence would find this evidence equally convincing," a Nissan spokesman said on Wednesday.

Renault has launched an internal audit following Ghosn's arrest, but the results have not yet been disclosed.

It's not clear whether the sharing of evidence against Ghosn, which was authorized by prosecutors in Tokyo, will cause Renault to change its approach to the crisis.

The indictment of Ghosn raises the prospect of a challenging court battle for the Brazilian-born business leader. He filed a complaint against his detention earlier this week but it was rejected by a Tokyo court.

More than 99% of people charged with a crime in Japan are eventually convicted, according to experts. The maximum punishment in Japan for filing a false financial statement is 10 years in prison and a fine of 10 million yen ($89,000).

Both Nissan and Renault have said Ghosn's arrest won't affect their alliance, which produces one out of every nine vehicles worldwide. Officials from the French and Japanese governments have echoed those sentiments.

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