Nissan CEO hints at reshaping Renault alliance post-Ghosn

Mr Carlos Ghosn was unanimously removed as Mitsubishi chairman and representative director, the company said.
Mr Carlos Ghosn was unanimously removed as Mitsubishi chairman and representative director, the company said.

Nissan chief executive Hiroto Saikawa hinted yesterday that he will seek a rebalance of power with French carmaker Renault, as the board of alliance partner Mitsubishi Motors met to sack disgraced chairman Carlos Ghosn.

Mr Ghosn, who was nabbed on Nov 19 at Tokyo's Haneda Airport on suspicions of financial misconduct, is being held at the Tokyo Detention House, reportedly in a cell measuring no larger than 5 sq m.

Prosecutors have till Dec 12 to press charges though under Japanese law, they could "rearrest" Mr Ghosn on a separate offence. This will reset the 23-day clock for which an accused can be detained by law.

The 64-year-old was unanimously removed yesterday as Mitsubishi chairman and representative director, the company said in a filing, because "he has lost the confidence of Nissan and it is considered difficult for (him) to continue conducting his activities".

Chief executive Osamu Masuko was named interim chairman, while Mr Ghosn retains his seat on the board until at least the next shareholders' meeting. "Keeping Ghosn on as our chairman will present a reputational risk to our company," Mr Masuko told reporters. "We had to make a decision that prioritises protecting the company, our employees and their families."

But he stressed the tripartite alliance was "not heading towards confrontation" as talk gains momentum abroad that Mr Ghosn's removal was orchestrated in a palace coup within Nissan, which has only a 15 per cent non-voting stake in Renault despite outselling the French carmaker and helping it to make inroads into the United States and China.

Conversely, Renault owns a 43.4 per cent stake in Nissan, which gives it voting rights. Nissan, meanwhile, has a 34 per cent stake in Mitsubishi Motors, which came on board the alliance in 2016 after Mr Ghosn steered the company through a cheating scandal involving fuel data.

 
 
 

While Mr Saikawa told a closed-door townhall meeting at Nissan's Yokohama headquarters - beamed to offices worldwide - that the alliance "would continue", he also said that he would "talk directly (with Renault) in the future", the Nikkei daily reported.

The three carmakers are due to meet in Amsterdam this week.

Japanese and French economy ministers have sought to quell concerns of a corporate slug fest even as observers note the growing chasm between the bedfellows brought together by Mr Ghosn.

French Economy Minister Bruno Le Maire said on Sunday he wanted the alliance to be kept as it is, without any change to the rules of governance. His Japanese counterpart Hiroshige Seko has also talked up the "winning" alliance.

Mr Ghosn has denied allegations that he had wilfully understated his income by about half the 10 billion yen (S$121 million) he had earned over five years to March 2015, public broadcaster NHK said. Japanese prosecutors, who have a conviction rate of over 99 per cent, have said the charge will carry a maximum jail term of 10 years.

A drip-feed of revelations, meanwhile, continued against the man who single-handedly rescued Nissan and Mitsubishi from oblivion.

The Asahi newspaper said that Mr Ghosn had understated his income by another 3 billion yen over three years ending March this year.

The Yomiuri has also reported that Nissan had been paying Mr Ghosn's elder sister US$100,000 a year since 2002 for a non-existent advisory role, while the Mainichi Shimbun said that Mr Ghosn used corporate funds to make a donation to his daughter's university.

Mr Nicholas Benes, a representative director of The Board Director Training Institute of Japan, told The Straits Times: "You can't help but wonder if this is partly fuelled by resentment and jealousy that has been brewing in Nissan ranks for some time."

 
A version of this article appeared in the print edition of The Straits Times on November 27, 2018, with the headline 'Nissan CEO hints at reshaping Renault alliance post-Ghosn'. Print Edition | Subscribe