Carlos Ghosn will remain Renault CEO despite being detained

Anna Jefferson
November 21, 2018

The solution adopted by Renault comes close to the one demanded earlier on Tuesday by the French economy minister, Bruno Le Maire, who considered that Ghosn "is no longer in a position" to continue as the head of the group, but that he has the right to the presumption of innocence.

The board, meeting later on Tuesday, will likely agree that director Philippe Lagayette should fill in as chairman, several people with knowledge of the deliberations said.

Ghosn and Kelly's current locations are not now known, but they can be held without charge for up to 23 days under Japanese law.

Renault's board, meanwhile, said it is requesting that Nissan pass along details of its investigation into Ghosn's alleged wrongdoing.

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The crisis at Nissan deepened Wednesday as it emerged the Japanese vehicle giant could itself face charges over the alleged financial misconduct that led to the stunning arrest of its chairman Carlos Ghosn.

His fate appears all but sealed after his hand-picked replacement as CEO, Hiroto Saikawa, launched an astonishing broadside at his mentor, saying "too much authority" had been placed in his hands and lamenting the "dark side of the Ghosn era".

It is the view of the prosecutors that Ghosn's alleged receipt of income from the subsidiary and the bonus system, as well as the housing benefits, should have been reported as part of his remuneration.

Prosecutors said that between fiscal 2010 and fiscal 2014, Ghosn and Kelly conspired to falsely report Ghosn's income at about 4.987 billion yen in Nissan's annual securities reports when in fact he received about 9.998 billion yen.

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That was something Nissan's board couldn't let happen, as it would equate to the Japanese company's total surrender to Renault.

The Nissan board is expected to remove Ghosn as chairman Thursday. Even as the French government-which holds a 15% stake in Renault-called for interim management to replace the besieged CEO, the leadership backed him firmly.

"He trampled on Japanese cultural norms with his flamboyant glory-hogging ways, and his massive compensation incited jealousies and invited retaliation", he told AFP. Japanese broadcaster NHK has also reported that Nissan spent millions buying luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam for his personal use.

His arrest has also raised alarms among Renault's French workers about what lies ahead.

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