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Renault replaces Carlos Ghosn as chairman, CEO after growing scandal at Nissan

21 November, 2018, 17:43 | Author: Kristi Dunn
  • Renault names interim CEO stands by Ghosn			Image by Renault

The board stopped short of firing Ghosn and requested that Nissan provide all information in its possession arising from its internal investigations that led to his arrest for alleged financial improprieties.

French automobile group Renault chose to appoint two interim heads of the company to replace Carlos Ghosn, who remains as Chairman and Chief Executive Officer but is "temporarily incapacitated", the company announced in a statement.

Prosecutors in Japan said they were holding Ghosn for allegedly collaborating to falsify securities statements and under-report $44.6 million in income from 2011 to 2015.

Later prosecutors said in a statement that Mr Ghosn and senior executive Greg Kelly had conspired to understate Mr Ghosn's compensation, starting in 2010.

"Groupe Renault ensures on a daily basis the efficiency of its partnerships within the framework of the Alliance and is particularly focused on the consolidation of the Renault Nissan Mitsubishi Alliance", it added. Although the amount is much smaller than had been indicated by sources a day earlier, Ghosn is also believed to have gained from compensation linked to stock prices.

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The Nissan board is expected to remove Ghosn as chairman Thursday.

Ghosn's leadership of the alliance - which began in 1999 as a means of rescuing Nissan from near-bankruptcy - deserves credit for "being the brainchild" behind a complex yet dynamic alliance that has proven beneficial to all OEMs involved, Anil Goyal, executive vice president of operations for Black Book, told AFN. Nissan has become the alliance's key player however, posting sales of 12 trillion yen ($106 billion) past year compared with Renault's 59 billion euros ($67 billion). "What he did was unprecedented in Japanese corporate history". Media reports also spoke of a lavish Marie Antoinette-themed party in 2016 for Ghosn's second wedding, at the grandiose palace of Versailles. Renault holds a 43.5% stake in Nissan, while Nissan owns 15% of Renault. However, would Nissan risk a crisis for itself and its Alliance partners altogether just to punish Ghosn for his alleged misdeeds?

According to the Financial Times, Ghosn was working on a merger of the two carmakers that Nissan opposed because it feared the Japanese company could be relegated to a secondary role.

Even when his reputation was sky-high, he attracted criticism for a flashy lifestyle at odds with traditional Japanese corporate culture and his salary.

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