Car executive, who is also chairman of Nissan, arrested in Japan over alleged misconduct
Carlos Ghosn presents Renault’s 2010 results.
Photograph: Emma Foster/EPA
France’s finance minister has declared Carlos Ghosn is no longer capable of leading Renault, after the executive, one of the leading figures in the global car industry, was arrested on Monday by Japanese prosecutors.
“Carlos Ghosn is no longer in a position where he is capable of leading Renault,” the finance minister, Bruno Le Maire, told France Info radio. “Renault has been weakened, which makes it all the more necessary to act quickly.”
The Renault board is meeting on Tuesday and Le Maire urged the group, in which the French government has a 15% stake, to set up an interim management structure. Le Maire said he had asked French tax authorities to examine Ghosn’s affairs and that they had found nothing of particular note.
Ghosn is accused of having understated his income and was exposed by a whistleblower, in a move that shocked the global car industry.
A towering figure in the automotive industry in recent decades, the French-Brazilian executive forged an alliance between France’s Renault and Japan’s Nissan and Mitsubishi that created the world’s second-largest car manufacturer. He is chairman of Nissan, chief executive and chairman of Renault and chairman of Mitsubishi.
Nissan said on Monday it would fire Ghosn this week, while the Mitsubishi board will meet next week.
Shares in Nissan plunged in Tokyo on Tuesday, ending down almost 5.5% and pulling the Nikkei index down to a three-week low. Renault shares fell another 3%, after losing more than 8% on Monday.
Japan’s prosecutors confirmed on Tuesday that they are investigating whether Ghosn and another senior Nissan executive, Greg Kelly, understated Ghosn’s income over five years from 2010. They are accused of reporting only half of Ghosn’s actual salary, of almost 10 billion yen (£69m) over the period. Ghosn is also accused of personal use of company assets.
Japan’s public broadcaster NHK reported that Nissan paid “huge sums” to buy luxury houses for Ghosn in four cities around the globe. The properties, in Rio de Janeiro, Beirut, Paris and Amsterdam, were acquired “without any legitimate business reason”, it claimed.
Ghosn’s downfall is expected to trigger a battle between Japan and France for control of the Nissan-Renault-Mitsubishi alliance.