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Arrest of Nissan's Ghosn rocks investor confidence in Renault
THE arrest of Nissan Motor Co chairman Carlos Ghosn over suspected financial violations, reported by NHK, has rocked investor confidence in Renault SA on concern of repercussions for the French-Japanese alliance, given his "pivotal" role in cementing their pact.
The French auto company fell as much as 15 per cent in Paris trading, the steepest intraday decline since June 2016, and the worst performer in a benchmark of European stocks.
Mr Ghosn, 64, created the three-way alliance of Renault, Nissan and Mitsubishi Motors Corp. Renault and Nissan have given themselves two years to decide on a possible merger between the two carmakers or find an alternative mechanism to enhance their partnership.
France will work to preserve the stability of Renault and its alliance with Nissan, President Emmanuel Macron said on Monday.
"It's too early to comment on the reality or materiality of the accusations, about which I have no further information," Mr Macron told reporters in Brussels. "As a shareholder, however, the French government will remain extremely vigilant regarding the stability of the alliance, the (Renault) group and ... its employees, who have the full support of the state."
Mr Ghosn is alleged to have made personal use of company assets and committed other unspecified acts of serious misconduct. He also failed to report his full compensation to stock market authorities as chairman of Nissan. The French state owns 15 per cent of Renault, which in turn holds a 43.4 per cent stake in Nissan.
The Japanese carmaker said that based on a whistleblower report, it had been investigating possible improper practices by Mr Ghosn and board member Greg Kelly for several months, and that it was fully cooperating with investigators. Nissan's board is set to meet on Thursday to remove them both.
Brazilian-born Mr Ghosn has long stood out among the world's auto executives as a hard-nosed workaholic able to get a troubled company back on its feet quickly. As head of the Renault-Nissan-Mitsubishi alliance, he has created an industrial behemoth, its combined 470,000 employees selling 10.6 million vehicles last year from 122 factories around the globe.
Long nicknamed "Le Cost Killer" in France, Mr Ghosn began his career with the tyre-maker Michelin and, after an early stint in Brazil, was quickly promoted and earned a reputation for turning around its North American operations. From there, he was recruited by Renault in 1996 to work alongside then CEO Louis Schweitzer where he helped return the company to profitability.
Just three years later, he was sent to head the newly acquired Nissan group with the challenge of doing the same thing within two years. He managed it within one. The performance made him a hero in Japan, where manga comics are devoted to the suave businessman known for always being up before dawn after just six hours of sleep a night.
"A boss has to have 100 per cent freedom to act and 100 per cent responsibility for what he does. I have never tolerated any wavering from that principle, I will never accept any interference," he once said. BLOOMBERG, AFP