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France Wants Renault To Remove Carlos Ghosn As CEO


11/20/2018


France Wants Renault To Remove Carlos Ghosn As CEO
A day after he was arrested in Japan for alleged financial misconduct as the Chairmen of Nissan, the French government has urged the Renault, in which the French government has a take, to also remove Carlos Ghosn as the CEO of the car maker. However, the government also urged the car maker to retain its partnership with Nissan.
 
Following admission by Nissan that Ghosn was involved in financial irregularities in the documents that he had submitted with the Tokyo Stock Exchange. He was arrested in Japan. He is one of the best known faces in the global auto industry. It is alleged that Ghosn had misappropriated company money to meet his personal requirements and had under-reported his earnings for a number of years at a stretch.
 
He is set to be removed from the post of chairman of Nissan on Thursday.
 
“Carlos Ghosn is no longer in a position where he is capable of leading Renault,” French Finance Minister Bruno Le Maire told France Info radio and urged the managing board at Renault to meet “in the coming hours” and to from an interim management structure.
 
About 15 per cent of the stocks in Renault is owned by the French state while Renault has a 43.4 per cent share in Nissan according to an alliance that is complex and one that was painstakingly forced by Ghosn over almost 20 years. Some analysts fear that the retrenchment of Ghosn could put in jeopardy the alliance.  
 
According to sources, the managing board of Renault will meet on Tuesday and the issue of Ghosn would also come up for discussions.
 “We have not demanded the formal departure of Ghosn from the management board for a simple reason, which is that we do not have any proof and we follow due legal procedure,” Le Maire said.
 
While claiming that it was in the best interests of both Japan and France and the companies to continue with the alliance, he said that he would soon have a discussion with his Japanese counterpart.  
 
“Renault has been weakened, which makes it all the more necessary to act quickly,” Le Maire said.
 
Nissan and Renault have acquired the capacity to compete with companies such as Volkswagen and Toyota on the global stage because of the synergies that have been generated because of the alliance for both the companies. Nissan now is an important part of the alliance and compared to the near bankruptcy that the Japanese company was when Renault bought stocks in the company in 1999, the alliance has been very fruitful for the Japanese car maker.
 
The news had already caused a drop in the shares of Renault at 8 per cent drop on Monday which was also extended into Tuesday. There was also a fall of 5.5 per cent in the shares of Nissan after a fall on Monday when the news first broke along with a 7 per cent drop in eth share price of Mitsubishi which is also a partner in the three member alliance.
 
Referring to the exit of Ghosh, the CEO of Mitsubishi Motors, Osamu Masuko, has said that three companies could find it hard to manage the alliance in the absence of its founder Ghosn.
 
“I don’t think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi,” he told reporters in Tokyo.
 
(Source:www.livemintt.com)