Renault says it needs more information on Ghosn allegations

Renault has given CEO Carlos Ghosn's pay arrangements a clean bill of health but has still not come to a con...

Posted: Dec 14, 2018 10:07 AM
Updated: Dec 14, 2018 10:07 AM

Renault has given CEO Carlos Ghosn's pay arrangements a clean bill of health but has still not come to a conclusion about allegations of financial crime that led to his indictment in Japan.

Renault said in a statement that its board of directors has now been briefed on the investigation by alliance partner Nissan that led to Ghosn's arrest on November 19. But the French carmaker has asked its lawyers to update the board again "promptly" after further assessing the information provided by Nissan.

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The statement also noted that Renault still "does not have information concerning Carlos Ghosn's defense." Ghosn remains locked in a Tokyo jail.

His 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 appointed interim management, while keeping Ghosn in his positions as CEO and chairman.

Meanwhile, it has been conducting its own review of Ghosn's pay package at the French carmaker between 2015 and 2018. It said Thursday that the preliminary findings of that investigation showed no irregularities.

Following Renault's announcement, Nissan said Friday that its board "made a unanimous decision regarding the misconduct of Mr. Ghosn and has offered to share that same information directly with the Renault board so they can make their own informed decision."

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 would find this evidence equally convincing," a Nissan spokesman said on Wednesday.

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.

Nissan said Friday that it "remains steadfast in its commitment to the alliance and will continue to support its partners in the best interests of shareholders, customers and employees."

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