Renault shares plummet as chairman arrested

Muriel Colon
November 20, 2018

Nissan's investigators have also uncovered "numerous other significant acts of misconduct", including Ghosn's personal use of company assets.

Bernstein's Warburton wrote that Ghosn's once-mighty reputation has been declining for years, while Krebs said Nissan never could meet Ghosn's goal of 10 percent USA market share even though it has relied on "bad behavior" such as heavy discounts and sales to rental auto companies.

Saikawa apologized at a press conference, saying he felt great disappointment.

Nissan chief executive Mr Saikawa insisted the partnership "will not be affected by this event".

Japanese media reported that Mr Ghosn had reported about 10 billion yen ($120 million) worth of annual compensation as about 5 billion yen for several years.

Mr Saikawa said he believed the misconduct "went on for a long period".

In 2010, Japan began requiring listed firms to disclose how much they were paying board members if their remuneration exceeded 100 million yen.

The carmaker added that it had been providing information to the Japanese Public Prosecutors Office and would continue to do so. A second Nissan executive, Greg Kelly, was also suspected of collaborating with him. He reportedly was questioned and arrested shortly after arriving on Monday from overseas aboard a private jet.

Janet Lewis, Macquarie's head of industrials research in Asia, said it was "in the interests of all three companies to get through this as there aren't a lot of alternatives for them, especially in light of the investments they have made together so far".

Ghosn became CEO of Nissan partner Renault in 2005, chairman of Nissan of 2008 and chairman of Renault in 2009, giving him considerable sway over both companies. Shares in Renault fell sharply after the news, dropping nearly 10%.

There has been no comment from Mr Ghosn or Mr Kelly. "There are problems in terms of governance".

Nissan said it will dismiss Ghosn as its chairman. Renault owns 43% of Nissan, which owns 15% of Renault and 34% of Mitsubishi.

Ghosn's name became well known in 1999 when he was sent from Renault to financially troubled Nissan as its chief operating officer.

But French Finance Minister Bruno Le Maire told broadcaster Franc-Info on Tuesday that Renault should name temporary leadership as Ghosn is not in a position to lead the group.

Mr Ghosn has been a titan of the motor industry for almost 20 years.

Dubbed the "cost-killer" in the 1990s for slashing jobs and closing factories, his reputation was cemented after his strategy succeeded.

Ghosn, 64, born in Brazil, schooled in France and of Lebanese heritage, is set to be ousted later this week from his spot as Nissan chairman.

Company documents show that Ghosn received $8.9 million in yearly pay until 2016, when shareholders voted against his pay deal.

The question is what happens now.

Shares in Renault fell more than 12 percent in late morning trading in Paris after the news about Ghosn came out.

Ghosn served as Nissan's chief executive from 2001 until last April. It's not clear what Renault will now do.

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