PARIS/TOKYO – Executives from both carmakers in the Renault-Nissan alliance looked at least twice at legal ways to pay Chairman Carlos Ghosn undisclosed income through the partners’ shared finances, documents seen by Reuters show.
The two efforts discussed in these documents were ultimately abandoned. However, the documents show for the first time that some discussions about compensating Ghosn out of the public eye were not confined to the Japanese carmaker, but also included Renault executives.
Ghosn’s undisclosed Nissan income is at the center of allegations by Tokyo prosecutors against the alliance chairman, who has been charged with failing to disclose ¥5 billion in compensation for 2010 to 2015 that he had arranged to receive later.
Since 2010, Japanese firms have been required to disclose details of executive remuneration including stock options and bonuses when the total exceeds ¥100 million.
The plans, which were considered in 2010 and 2017, sought to find legal channels through which Ghosn could receive undisclosed payments.
Ghosn and Greg Kelly, a Nissan director, are still in custody and have had little opportunity to defend themselves in public.
Ghosn, who remains Renault’s chairman and chief executive, denies that the alleged pay deals broke any laws, his Japanese lawyer has told the media. Japanese media have also reported that Kelly has denied the allegations. U.S. representatives for Ghosn and Kelly declined to comment.
Reuters reviewed internal emails and invoices related to the projects and spoke to people with direct knowledge of them.
Executives, including Renault’s general secretary Mouna Sepehri, worked on a proposed 2010 plan to create an additional source of compensation for Ghosn through the alliance’s Dutch holding Renault-Nissan BV (RNBV), according to an internal email seen by Reuters.
In the April 22, 2010, email to Sepehri and one other recipient identified only as Scott, Kelly wrote: “I greatly appreciate the work you have done to analyze whether part of the CEO’s compensation can be paid by RNBV without disclosing it publicly.”
“I have reviewed all of the information you have provided me with the CEO and have explained to him that there are good legal grounds for RNBV being able to pay … part of his compensation without having to publicly disclose the amount,” Kelly wrote.
In a statement to Reuters late on Tuesday, Renault said it had ultimately responded that any such pay “would have to be made public in France.” It added: “To the best of Renault’s knowledge, this project was never implemented.”
Kelly’s email was unearthed by the Nissan investigation of Ghosn.
Kelly had “consulted several people at Renault and Nissan to establish whether it was legally possible that part of the CEO’s compensation be paid by RNBV to reflect the time he spent working on alliance synergies,” the company said.
Renault owns 43.4 percent of Nissan, whose 15 percent stake in its French parent carries no voting rights. Nissan, in turn, controls Mitsubishi Motors Corp. via a 34 percent holding. Their combined 10.6 million vehicle sales rival Volkswagen and Toyota.
Nissan now wants to examine the finances of jointly owned RNBV and other alliance entities. Renault, whose biggest shareholder is the French state, has so far ignored its request for an independent investigation.
In 2017, as deferred Nissan income owed to Ghosn continued to mount, alliance executives tried another approach.
Renault-Nissan bankers developed plans to pay millions of euros in undisclosed bonuses to Ghosn and other alliance managers via a Dutch service company. On June 13, 2017, Reuters reported details of the plan contained in an eight-page document. Two days later at Renault’s shareholder meeting, Ghosn denied that such a plan existed.
“There is no truth in any of this,” Ghosn told shareholders at the meeting, as Renault deputy CEO Thierry Bollore and Sepehri looked on. “I can tell you that every week we get proposals from consultants and banks at my level.”
The plan was scrapped soon after that, invoices and emails show.
According to documents reviewed by Reuters, Bollore and Sepehri were among a small group of executives included in emails and meetings about the bonus plan, along with Hiroto Saikawa, now Nissan’s CEO.
Reuters could not establish what roles the executives played in the planning process.
Both carmakers declined to make the three executives available for comment.
On July 25, 2017, financial adviser Ardea Partners, which had worked on the plan, billed Renault-Nissan $1.5 million, plus $49,219.57 in expenses, for “services rendered.” That was half the $3 million fee that had been agreed in a May 13 contract seen by Reuters, drawn up as the project moved towards implementation, and payable on completion.
Ardea Managing Director Robert Falzon declined to comment.
“It feels like we are truly in the final inning,” Ardea’s Chris Cole had written in a May 26-27 email chain to a project group he addressed as “Team Cavalry.”
Renault said on Tuesday that Ardea had “worked as financial advisors on many corporate subjects for RNBV,” in response to Reuters questions on the bonus plan.
Renault told Reuters its executives had not led the project. “On certain subjects there were exchanges with some Renault and Nissan executives, including Mr. Saikawa, Mr. Bollore and Ms Sepehri,” it said.
Nissan, which is pressing Renault for a joint investigation of alliance finances, also wants to re-examine a recent decision to create a new alliance foundation in Switzerland.
In a Sept. 26 resolution seen by Reuters, the Renault-Nissan board signed off on a €30 million transfer to the organization, documents show.
The transfer was approved by 10 alliance executives including Ghosn, Bollore, Sepehri and Saikawa. But it was canceled after Ghosn’s Nov. 19 arrest in Japan, before the cash was moved, two sources said.
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