Carlos Ghosn loses Renault support as France wants new leadership

Carlos Ghosn loses Renault support as France wants new leadership

 

 

Support for jailed ex-Nissan boss Carlos Ghosn seems to be wearing thin as Renault’s biggest shareholder, France ask that he be replaced as CEO.

The auto executive has been locked in a Tokyo jail for nearly two months on charges of financial misconduct while still the chairman of Renault. Nissan has earlier removed him as CEO and appointed an interim head.

French Economy Minister Bruno Le Maire told French news channel LCI on Wednesday that it was time for new leadership at Renault.

‘We want a meeting of the Renault executive board in the next few days,’ Le Maire said. ‘We’re asking for new long-term leadership,’ he added.

The French government owns 15% of Renault (RNSDF). It had previously backed the company’s decision to allow Ghosn to keep his positions while awaiting trial, which his lawyers believe could be six months to a year away.

The French Government asked Renault to convene a board meeting on Sunday to begin the process of appointing one or more successors to Ghosn, according to a Reuters report.

ALSO READ: Nissan Chairman Carlos Ghosn Arrested Over Financial Wrongdoing

Ghosn, 64, was indicted on Friday for a second time since his arrest on November 19. He has been charged by Japanese prosecutors with temporarily transferring personal investment losses to Nissan. He is also charged with understating his income by millions of dollars between 2010 and 2018.

 

He has strongly denied the charges and in a court hearing last week said he had been unfairly detained on ‘meritless and unsubstantiated accusations.’ His application for bail has been rejected, and he faces a combined maximum sentence of 15 years in prison if found guilty.

Ghosn’s spectacular downfall has shaken the international auto industry and strained the world leading alliance he built between Nissan (NSANY), Renault and Mitsubishi Motors (MMTOF).

The alliance was founded in 1999 and now produces one out of every nine cars sold worldwide, employing 450,000 people. Ghosn’s arrest and subsequent indictment have inflamed tensions within the group. Nissan and Mitsubishi both removed him as chairman, while Renault stood by him.

ALSO READ: More Grief For Ghosn as Prosecutors Bring Two Fresh Charges

With its leader facing a protracted legal battle, the biggest risk to the alliance is a lack of coordinated investment at a time of rapid change for the global auto industry.

‘No deepening of the alliance can take place, which is really unfortunate,’ said Demian Flowers, an autos analyst at Commerzbank, last week. ‘You need to be making bold investments in order to survive in the current context.’

Le Maire said it was important to think of the hundreds of thousands of workers who need long-term leadership. There would be several candidates, he added.

Nissan and Greg Kelly, a former director at the firm who was arrested along with Ghosn but has since been released on bail, have also been indicted on allegations of financial misconduct. Kelly denies any wrongdoing.

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