Nissan CEO hints he will review Renault alliance as Mitsubishi strips Carlos Ghosn of chairman post

Nissan Motor Co. CEO Hiroto Saikawa hinted Monday he intends to review the carmaker’s alliance with Renault, company sources said.

According to the sources, Saikawa said the relationship is “not equal” during a meeting with Nissan employees to explain the arrest last week of former Chairman Carlos Ghosn.

The sources said he also apologized to employees for undermining their trust in the company.

Saikawa said he wants “the will of Nissan” to be given more weight in relations with Renault, according to the sources.

The meeting was held at Nissan’s headquarters in Yokohama and broadcast live to the carmaker’s factories and offices nationwide.

Following his arrest on Nov. 19, Nissan dismissed Ghosn as chairman at an emergency board meeting last Thursday.

Mitsubishi Motors Corp., the third partner in the Japanese-Franco alliance, stripped Ghosn of his role as chairman of that firm at a board meeting later Monday. The automaker said CEO Osamu Masuko has tentatively taken on the role of chairman.

Ghosn remains CEO and chairman of Renault.

While Nissan has said the alliance “remains unchanged,” Saikawa’s remarks indicate that Nissan is seeking a bigger say.

The three-way alliance that has been led by Ghosn is seen to favor Renault, even though Nissan has contributed about 50 percent of the French automaker’s net income in recent years.

Renault owns a 43.4 percent stake in Nissan, which holds a 15 percent stake in its French peer but with no voting rights and 34 percent in Mitsubishi Motors.

The French government is also involved in the complex structure, being the top shareholder of Renault with a stake of about 15 percent.

French Finance Minister Bruno Le Maire said Sunday on BFM TV that he hopes the alliance will continue to be led by a person from Renault and to maintain the shareholder structures in the group.

Le Maire also said Renault has launched an investigation into whether Ghosn conducted misdeeds over his remuneration and company assets, with the outcome expected to be concluded as early as this week.

The top executives of the three automakers are making arrangements to hold a meeting this week to discuss how to run the three-way alliance, sources familiar with the matter have said.

It was also learned Monday that Nissan has excluded from the company’s consolidated accounting a Dutch-based subsidiary involved in its former chairman’s alleged financial misconduct, in an apparent attempt to evade screening by auditors, sources close to the matter said.

Ghosn is believed to have used luxurious residences purchased by the subsidiary, Zi-A Capital BV, for free.

Tokyo prosecutors are also looking into the involvement of Greg Kelly, a former Nissan representative director who has also been dismissed, in Ghosn’s alleged misdeeds.

The subsidiary was founded in Amsterdam in 2010 with Nissan investing around ¥6 billion, the sources said. Ghosn reportedly became a board member when it was established but resigned the following year.

Currently, Kelly and some former Nissan executives are on the list of its board members, but according to documents submitted to a local chamber of commerce there are no employees at the subsidiary, and it is highly likely the unit has had no actual business activities.

Japanese companies normally include subsidiaries in their consolidated accounting reports, but parent firms can decide not to do so if their control over them is temporary or they have little financial impact on their groups.

Prosecutors believe Ghosn’s understated remuneration includes the benefit of using homes that Zi-A purchased in countries such as Brazil and Lebanon.

Ghosn was arrested for allegedly underreporting his remuneration in securities reports by around ¥5 billion ($44 million) for five years through fiscal 2014. He received nearly ¥10 billion during that period. Ghosn has reportedly denied the charge.

The ousted chairman has not commented publicly on the matter since his arrest.

Kelly was arrested along with Ghosn on suspicion of conspiracy and was dismissed as a representative director at the board meeting. Both Ghosn and Kelly have denied the charges, according to sources close to the matter.

Nissan has said an internal investigation uncovered Ghosn’s “significant” misconduct, including underreporting his remuneration and misappropriation of funds to cover private expenses, which were carried out over a long period of time. It also said Kelly was “deeply” involved in the misdeeds.

A Nissan Motor Co. vehicle sits outside the company's headquarters in Yokohama on Monday.A big TV screen at JR Osaka Station on Oct. 15 displays news of Prime Minister Shinzo Abe's announcement to raise the consumption tax next autumn as planned.People walk past the Tokyo headquarters of Mitsubishi Motors Corp., where board members were to decide Monday whether to oust Carlos Ghosn as chairman, a move taken by Nissan Motor Co. last week.

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