Business / Corporate

Nissan and Renault weigh closure of Dutch joint venture that reportedly funded Ghosn's parties

Kyodo

Nissan Motor Co. and Renault SA are considering closing their joint venture in the Netherlands, sources said Monday, with the Japanese-French auto alliance aiming to establish a new management structure after the arrest of former Chairman Carlos Ghosn.

As the alliance looks to strengthen joint operations, Nissan, Renault and their third partner, Mitsubishi Motors Corp., said their top executives will hold a joint news conference Tuesday at Nissan’s headquarters in Yokohama.

The Amsterdam-based joint venture, Renault-Nissan B.V., which oversees the partnership’s operations, had been led by Ghosn until he was detained in Tokyo on Nov. 19 for alleged financial misconduct.

The venture, set up in 2002, had become nonfunctional in recent years, and the alliance including Mitsubishi Motors Corp. has decided on key strategies at other meetings, according to the sources.

The joint venture funded a dinner party held at the Palace of Versailles on the former chairman’s birthday and parties with his friends at Rio de Janeiro’s Carnival, French media reports have said.

The two automakers last month launched a joint investigation into whether the venture is involved in any potential financial misconduct.

Ghosn was replaced as chairman and CEO of Renault by Jean-Dominique Senard and Thierry Bollore, respectively, and Nissan removed Ghosn as chairman and appointed Senard as a new director subject to approval at a shareholders meeting April. 8. Bollore also succeeded Ghosn as chairman of the joint venture.

Nissan, Renault and Mitsubishi Motors are looking to strengthen their joint operations under their new management teams.

In a similar move, Nissan and Mitsubishi Motors are considering dissolving their joint venture, Nissan-Mitsubishi B.V., which was established in June 2017 in the Netherlands.

Mitsubishi Motors said in January that an internal investigation had found Ghosn “illegally” received around €7.82 million (¥977 million) in remuneration from the venture.

In the meantime, the Tokyo District Court has rejected Ghosn’s request to attend a Nissan board meeting Tuesday, sources said Monday.

Ghosn was released on bail Wednesday after making his third request, more than three months after he was arrested for alleged financial misconduct.

Nissan removed Ghosn from his post afterward, but he still remains a director. The company plans to propose dismissing him as director at an extraordinary shareholders meeting April 8.

Ghosn, who denies the allegations against him, believes he is obligated as a director to attend the board meeting, his lawyers said.

His release is conditional on restrictions that address concerns he could tamper with evidence. Attending a board meeting requires court approval as the bail conditions include a ban on contact with Nissan executives and other people potentially linked to the allegations.

Ghosn is accused of underreporting his remuneration in Nissan’s securities reports by around ¥9 billion over eight years. He is also charged with aggravated breach of trust for allegedly transferring personal losses of ¥1.85 billion ($16.6 million), linked to derivatives contracts, to Nissan, and having the automaker pay $14.7 million to a Saudi businessman who extended credit to him.

Greg Kelly, a close aide of Ghosn who was also arrested and indicted for conspiring to understate Ghosn’s remuneration in the securities reports, does not intend to attend the board meeting, sources close to the matter said.

Kelly, who was released on bail in late December, was dismissed as representative director after his arrest but also remains a Nissan director. He likewise denies the allegations against him.