Carlos Ghosn Leaves Renault's Board Amid Legal Fight in Japan
In addition to Ghosn, Cherie Blair and Philippe Lagayette will also leave the board.
(Bloomberg) -- Renault SA said former Chairman and CEO Carlos Ghosn made questionable payments to a distributor in the Middle East and an outside lawyer, adding to accusations of financial misconduct by the fallen titan.
Certain expenses “are a source of concern, as they involve questionable and concealed practices and violations of the group’s ethical principles,” Renault said in a statement on Wednesday. The board pointed in particular to “concerning relationships with third parties, management of conflicts of interest, and protection of corporate assets.”
Other expenses of several million euros by RNBV, the Amsterdam-based company overseeing a partnership with Nissan Motor Co., also raise concerns, Renault said. The latest findings may lead to legal action in France, after earlier transactions were brought to authorities, the company added.
Renault is working to get its house in order following Ghosn’s arrest on Nov. 19 in Tokyo, an event that precipitated a crisis within the three-way partnership with Nissan and Mitsubishi Motors Corp. He has denied accusations of financial wrongdoing at Nissan and is awaiting trial. Ghosn resigned as chairman and chief executive officer of Renault in January and the company began an internal investigation.
The French carmakers’ allegations capped a day of fresh twists in the Ghosn saga. Hours after the embattled former executive took to Twitter to announce he would give a news conference on April 11 to “tell the truth” about the accusations he’s facing in Japan, Sankei newspaper reported that Ghosn would be re-arrested by prosecutors in Tokyo on a new charge of breach of trust.
Wednesday’s board meeting discussed the findings of the probes at both Renault and RNBV. The latter company suffers from “serious deficiencies in terms of financial transparency and expenditure control procedures,” Renault said.
The auditors carrying out the investigation at RNBV are examining the extent of actual work billed by consultants, including French politician Rachida Dati, a person familiar with the matter has said. They are also looking at payments made for Ghosn’s Lebanese lawyers, an extended weekend in Copacabana organized by Ghosn, and an event at the Palace of Versailles for the anniversary of the Renault-Nissan alliance, the person said.
Renault and Nissan have uncovered payments made under Ghosn that allegedly went toward corporate jets, a yacht and his son’s startup, leading the French carmaker to alert authorities about potential wrongdoing, Bloomberg reported. The transactions were revealed in probes and amounted to millions of euros to companies in Oman and Lebanon that may have then been used for the personal benefit of Ghosn and his family, said the people, who asked not to be identified because the details aren’t public.
A spokeswoman for the Ghosn family has denied the latest allegations and described them as part of a smear campaign to make the former executive look greedy. A spokesman for Ghosn’s son’s startup, called Shogun, denied the allegations. The San Francisco-based company has a platform for home improvement financing.
Renault on Wednesday also made changes to its governance. Ghosn will quit a slimmed-down board along with Cherie Blair and Philippe Lagayette, the company said. Bloomberg reported on the planned changes last month. Annette Winkler, the former head of Daimler AG’s Smart brand of cars, will be proposed as a new director.
In further steps to put an end to the era under the high-flying executive, Renault’s board also decided on his successors’ salaries. Chairman Jean-Dominique Senard will receive a fixed salary of 450,000 euros ($506,000) a year with no bonuses or stock options, while CEO Thierry Bollore will get close to 900,000 euros in salary, with additional variable compensation and advantages, people familiar with the matter said.
The pay is less than what Ghosn earned at Renault. Last year, shareholders only narrowly approved a 7.4 million-euro pay package for 2017. For 2018, the carmaker scrapped millions of euros in payouts to him including benefits from a non-compete agreement he signed in 2015 and stock-based compensation that was conditional on him staying at the company.
On Wednesday, the board also decided Ghosn isn’t entitled to a retirement salary top up and a variable portion of his 2018 compensation, according to a statement. The top up would have been worth about 765,000 euros a year, people familiar said, and the variable cash payment would have been 224,000 euros. Ghosn got a fixed salary last year of 1 million euros.
To contact the reporter on this story: Ania Nussbaum in Paris at anussbaum5@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel, Frank Connelly
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