Business / Corporate

French finance minister says Renault to bring case against Carlos Ghosn over shady expenses

AFP-JIJI, Reuters

The French finance minister said Wednesday that Renault SA — in which the French government holds a 15 percent stake — plans to bring a case against former Chief Executive Carlos Ghosn after identifying €11 million (¥1.3 billion) of questionable expenses.

The prospect of new legal action backed by France marks a new headache for the former Renault CEO, who was also Nissan chairman in the alliance with the Japanese carmaker, after his arrest in Tokyo in November.

“The (French) state will hand over all the elements to the judicial authorities and there will be a complaint,” Finance Minister Bruno Le Maire told BFM TV in an interview.

“The state will play its role fully as a Renault shareholder. When the state has a shareholding like it does in Renault, its role is to assure that (corporate) governance works well,” he added.

He said the conclusions of an internal audit carried out by Renault had uncovered “reprehensible” facts and it was now up to the judicial authorities to take the next decision.

The internal audit conducted by Renault and Nissan Motor Co. identified €11 million of questionable expenses at their Dutch subsidiary RNBV linked to Ghosn.

“These findings confirmed the existence of deficiencies within RNBV in terms of financial transparency and procedures for monitoring expenditure,” Renault said in a statement late Tuesday.

It said that the company was looking into legal action over Ghosn’s “extra costs of air travel” and other expenses “as well as exploring recovering from Mr Ghosn gifts made to some non-profit organizations.”

The 65-year-old Ghosn, who maintains his innocence, is awaiting trial in Japan over charges of underreporting his salary for years while at Nissan and using company funds for personal expenses.

Ghosn says the accusations of financial misconduct in Japan are politically driven by enemies at Nissan. Ghosn was credited with leading Renault’s rescue of Nissan from near bankruptcy.

Renault board members had met Tuesday to discuss a proposed merger with Fiat Chrysler Automobiles NV. Renault said it was studying the offer with interest but would meet Wednesday for more discussions.

Fiat Chrysler has resolved key differences with France over its proposed merger with Renault, three sources have said, as talks on the $35 billion tie-up plan progressed toward a possible agreement on Wednesday.

An emerging compromise over French influence on a combined FCA-Renault could clear the way for Renault’s board to approve a framework deal and begin the long process of a full merger. FCA, Renault and its 15 percent shareholder, the French state, have been locked in talks over the Italian-American manufacturer’s bid to create the world’s third-biggest carmaker. France has broadly welcomed the deal, on condition it guarantees Renault’s domestic blue-collar jobs and plants.

Its directors will “continue to study with interest the opportunity of such a combination,” Renault said in statement.

FCA’s proposal would see both companies acquired by a listed Dutch holding company owned 50-50 by current FCA and Renault shareholders, after payment of a €2.5 billion ($2.8 billion) special dividend to FCA shareholders.

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