France, Japan Pledge to Keep ‘Winning’ Renault-Nissan Alliance

(Bloomberg) -- France and Japan Tuesday reaffirmed their support for the Renault-Nissan alliance, a day after its chairman Carlos Ghosn was arrested in Japan over allegations of financial impropriety.

French Finance Minister Bruno Le Maire and Hiroshige Seko, Japan’s minister of economy, trade and industry, had a phone conversation Tuesday, according to a joint statement from the two ministries.

Le Maire and Seko “reaffirmed the strong support of the French and Japanese governments to the Alliance formed between Renault and Nissan,” which they characterized as “one of the greatest symbols of Franco-Japanese industrial cooperation,” and noted “their shared wish to maintain this winning cooperation,” according to the statement.

The news of Ghosn’s arrest on Monday came as a shock for both French authorities and board members of Renault, of which Ghosn is chairman and chief executive officer.

Ghosn stands accused of under-reporting income of about $44 million and misusing company funds at Nissan Motor Co., where he was also chairman. The developments have cast doubt over the future of the long-standing Renault-Nissan-Mitsubishi Alliance, held together by his towering presence.

Ghosn, who was set to leave in 2022, had been laying the groundwork to ensure a future for the Alliance, including the option of a merger. The setup has come under pressure from Nissan in recent years because of its lopsided balance of power in favor of Renault. Through complex cross-shareholding arrangements, Renault owns 43 percent in Nissan, including voting rights, while Nissan owns a 15 percent non-voting stake in Renault.

To contact the reporter on this story: Geraldine Amiel in Paris at gamiel@bloomberg.net

To contact the editors responsible for this story: Vidya Root at vroot@bloomberg.net, Katerina Petroff

©2018 Bloomberg L.P.