Fractured Nissan board gathers for high-stakes clash over Carlos Ghosn
TOKYO (BLOOMBERG) – Nissan Motor Co’s board is set to meet on Thursday (Nov 22) in Japan without a consensus on whether to dismiss Mr Carlos Ghosn, the chairman whose surprise arrest over allegations of financial misconduct has left the Renault-Nissan alliance in a bind over his future.
Board members in Japan are divided over whether to dismiss Mr Ghosn as chairman, with French representatives baulking at firing their long-time leader outright, Bloomberg reported on Wednesday.
Nissan chief executive officer Hiroto Saikawa is the probable candidate to replace Mr Ghosn on an interim basis if he is removed, Nikkei reported on Thursday.
New details of the Ghosn investigation also are likely to emerge. Tokyo’s deputy public prosecutor will hold a press conference on Thursday at 4pm local time (3pm Singapore time), and reporters are certain to focus on a case that has stunned the business world and reverberated throughout the global auto industry.
The split over what to do with Mr Ghosn stems from a lack of information about the investigation, the people familiar with the matter told Bloomberg.
In Paris, Renault’s board gave Mr Ghosn the benefit of the doubt despite the allegations, putting in place new interim leadership, but letting the Renault CEO keep his title, saying he should be presumed innocent for now until more details surface.
The fraying of the alliance between Nissan and Renault following Mr Ghosn’s arrest on Monday shows how crucial he is to maintaining peace in the complicated partnership.
The probe has been orchestrated by Nissan as it covers alleged financial transgressions principally tied to Japan, and Mr Saikawa has emerged as a driving force behind the investigation.
The French side, meanwhile, had been left in the dark and was forced to respond to the fallout, including concern that the partnership itself may be in jeopardy.
The fractured response to the arrest has fuelled speculation about whether Mr Ghosn was ousted in a palace coup-like fashion, which Mr Saikawa has denied. But Mr Ghosn’s former protege has been the most outspoken in his dismissal of his boss, saying the findings leave no conclusion other than that the star executive should be dismissed.
Securing a unanimous decision to oust Mr Ghosn as chair will likely be difficult because Nissan directors who used to work at Renault may not back the dismissal until the allegations against Mr Ghosn are made clear, according to people familiar with board members’ deliberations.
Mr Ghosn will be detained for another 10 days, Japanese broadcaster NHK said on Wednesday. A Nissan director, American Greg Kelly, has also been accused of wrongdoing in relation to Mr Ghosn’s compensation.
The Nissan directors present in the meeting will vote anonymously on a one-person-one-vote basis, and outcomes will be determined by a simple majority, according to two people briefed on the matter. That means there needs to be at least four votes in favour for motions to be carried.
The board won’t name any new members to replace Mr Ghosn and Mr Kelly, according to the people. While the two can lose their respective roles of chairman and representative director, a shareholder vote is required to dismiss them from the board completely.
Mr Ghosn, who was among the best-paid executives in both France and Japan, stands accused of under-reporting income of about US$44 million (S$60.43 million) and misusing company funds at Nissan. He has not commented on the allegations or been seen in public since his arrest.
At Renault’s emergency meeting, the board indicated that it was in the dark about the details of the allegations.
“At this stage, the board is unable to comment on the evidence seemingly gathered against Mr Ghosn by Nissan and the Japanese judicial authorities,” the company said in a statement.
His arrest has cast a shadow over the career of one of the most illustrious characters in the global car industry. It has also led to speculation that it would lead to a tectonic shift in the world’s largest automotive partnership.
The structure has been controversial in Japan, as Nissan outgrew Renault in sales and profits. Renault owns a 43 per cent voting stake in Nissan, but the latter owns only 15 per cent of Renault – and has no voting rights.
Nissan has long been unhappy about what it considers the outsize French role, and Mr Saikawa made reference to that perceived imbalance at his late Monday press conference. The French side, conversely, has been keen to maintain – if not intensify – the relationship.
French Finance Minister Bruno Le Maire said on Wednesday that the partnership is set to continue and will deepen. As Renault’s largest shareholder, the state is “totally attached to the alliance of Renault and Nissan”, he said.
Interim Renault CEO Thierry Bollore said: “The alliance is vitally important for Renault and we will ensure total continuity with our partners.”
Mr Ghosn himself had worked towards a merger of Nissan and Renault to solidify their two-decade-old relationship, a union that would create a direct rival to Volkswagen AG and Toyota Motor Corp for the title of the world’s largest automaker.
But with the executive in custody and his future at both the French and the Japanese company unclear, what had always seemed like an audacious plan has become even harder to pull off.
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