Renault board accuses Ghosn of violating company ethics
French carmaker publicly criticises former leader for the first time following probe
The board of Renault has accused Carlos Ghosn of “questionable and concealed practices” in personal spending and violating the company’s ethics, the first time the French carmaker has publicly criticised its former leader.
A probe by the carmaker into Mr Ghosn uncovered suspicious payments to the Middle East as well as benefits that accrued to him in his position at the head of the company.
A separate investigation also uncovered “serious deficiencies” in “financial transparency” at the Dutch holding company that was at the centre of the alliance Mr Ghosn headed for close to two decades before his arrest last November.
The French board plans to dock €1m from Mr Ghosn’s pay package at Renault, including bonus payments from last year and a portion of his future pension.
It marks a reversal for Renault, which was initially reluctant to condemn Mr Ghosn in the days that followed his shock arrest last November by Tokyo prosecutors, who later charged him with financial misconduct at Nissan.
Mr Ghosn quit as chief executive and chairman of Renault in January and will quit as a director of the company in June, the board said on Wednesday. Renault is looking to shrink its board, with two other directors stepping down and only one joining.
Mr Ghosn has consistently denied the allegations against him. He has vowed to “tell the truth” next week at his first press conference since his November arrest.
Renault’s own internal investigation is now complete. It found that Mr Ghosn’s pay from 2010 to 2018 was “in compliance with applicable regulations, with the exception of some errors which are being corrected.”
However, the board also said that “certain expenses incurred by” Mr Ghosn “are a source of concern, as they involve questionable and concealed practices.”
Those expenses include Renault’s sponsorship of the Palace of Versailles which allowed Mr Ghosn’s use of part of the venue for a wedding party, at an estimated cost of €50,000 and potential issues concerning payments made to one of Renault’s distributors in the Middle East.
Both Renault and Nissan have discovered payments made to a Nissan-Renault distributor in Oman that are suspected to have been subsequently diverted for his personal use, according to people familiar with the matter. Last week, Renault brought those payments to the attention of French judicial authorities.
The joint investigation with Nissan into RNBV, the Dutch-listed alliance joint venture, has yet to conclude with a final report expected closer to the end of this month.
However, on Wednesday, Renault said that “RNBV’s internal organization suggests serious deficiencies in terms of financial transparency and expenditure control procedures” and that “certain expenses which have yet to be precisely quantified, but may amount to several million euros since 2010, raise serious questions as to their conformity with RNBV’s corporate interest.”
Investigators have been looking at fees paid to consultants via RNBV and the cost of using leased private jets, say people familiar with the matter. The existence of those jets came as a surprise to Renault, according to people close to the company, even if people across the alliance and Mr Ghosn say they were not a secret.