Industry Europe – Issue 28.5

Page 27

EURO-REPORT

FOCUS ON...

France Ian Sparks reports from Paris on the fall of an industry titan.

F

rench car giant Renault has been plunged into chaos this month after its chief executive Carlos Ghosn was arrested on suspicion of spending almost €16 million on luxury property using money from Japanese car-maker Nissan, where he is also chairman. The French government – which has a 15 per cent stake in Renault – has called this month for an ‘interim governance’ structure to be put in place at the company while Ghosn’s financial dealings are investigated. Meanwhile, shares in both car companies plunged following Ghosn’s arrest in Tokyo on November 19. Nissan CEO Hiroto Saikawa has announced that after a months-long investigation prompted by a whistleblower Brazilian-born Ghosn would be dismissed for ‘significant acts of misconduct’ that allegedly included under-reporting his salary and using company assets for personal benefit. The Japanese media reported that Nissan had provided Ghosn with houses in four countries where he had ‘no legitimate business reason to reside’. Ghosn, 64, also serves as chairman of Mitsubishi Motors, and became one of the world’s leading industry tycoons after helping forge an alliance between the three companies to create the world’s biggest car seller. The disgraced executive is accused of spending three million euros on a sprawling penthouse apartment in Tokyo, and millions more on sumptuous homes in Paris, Amsterdam, Rio de Janeiro and Beirut. After his arrest for financial misconduct, his ex-wife Rita Ghosn has shared a Facebook post declaring ‘all narcissists lie and abuse behind closed doors’. French Finance Minister Bruno Le Maire told France-Info that Ghosn is not in a position to lead the Renault Group because of the accusations. He urged the board to hold an emergency meeting to strip Ghosn of his CEO title, and hand control to his number two, Thierry Bollore. But Le Maire added that the

authorities had examined Ghosn’s tax situation in France and found no wrongdoing. In Paris, Renault’s senior executives were reported to have pledged their full support to Ghosn, while the Lebanese government said it would stand by him, with foreign minister adding: “Carlos Ghosn is a Lebanese citizen who represents one of the Lebanese successes abroad and the Lebanese foreign ministry will stand by him in his adversity to ensure he gets a fair trial.” Ghosn’s fall from grace has now led to speculation about the future of the alliance between Renault, Nissan and Mitsubishi. Le Maire and Japanese Economy, Trade and Industry Minister Hiroshige Seko are said to have spoken by telephone to ‘reaffirm the strong support’ of both governments to the union, which they described in a joint statement as ‘one of the greatest examples of Franco-Japanese industrial cooperation’. But in Tokyo, national media network NHK said Nissan had paid ‘huge sums’ to buy and maintain luxury residences for Ghosn in Beirut, Paris, Amsterdam and Rio de Janeiro that were not for legitimate business reasons. The purchases were not declared in stock market filings, while Ghosn was underpaying or not paying rent, NHK alleged. It also accused Ghosn, who was in charge of paying Nissan’s top 13 executives, of secretly siphoning off some of that money for himself.

Le cost-cutter Ghosn graduated as an engineer in Paris in 1974, and began his career in 1978 at Europe’s biggest tyre maker Michelin where over 18 years he rose to plant manager in Le Puy-en-Velay, France, to chief operating officer for Michelin North America. He joined Renault as an executive vicepresident in 1996, and forged the alliance between Renault and Nissan three years later, then becoming Nissan’s fourth nonJapanese chairman.

He won many admirers during his long career as one of the world’s leading auto executives, winning praise for his cost-cutting and vision to promote electric vehicles and low-cost vehicles. But he also attracted critics for his high salary, with shareholders voting down his pay in 2016, although the vote was nonbinding. Only by agreeing to a pay cut did Ghosn get shareholders’ approval at an annual meeting in Paris in June. In Japan this month some industry experts questioned whether Ghosn was being treated in the same way that a Japanese executive might be treated in similar circumstances in a country where prosecutors have been criticised in the past for being too soft on home-grown politicians and corporate executives accused of wrongdoing, and too harsh on foreigners. Ghosn is currently in custody in Tokyo, where he can be held for up to 23 days before being charged. If bail is granted, it would be ‘exorbitant, in hundreds of millions of yen’, or millions of dollars, according to Tsutomu Nakamura, a former prosecutor at the Tokyo District Public Prosecutors office. But in major cases like this, ‘often no bail is granted until after the arraignment at the first court session’. Falsifying corporate annual reports, which Ghosn and Nissan Representative Director Greg Kelly are accused of, carries a maximum penalty of up to ten years in prison and/or a fine of up to 78,000 euros, under the Financial Instruments and Exchange Act. Nobuo Gohara, the head of a law firm specialising in compliance, said he had not heard of a previous case in which a false statement regarding directors’ compensation in a securities report had resulted in such a punishment. He wrote in a blog post: “There is a question whether this case should be charged as a criminal one.” Japanese Chief Cabinet Secretary Yoshihide Suga told the media: “It’s extremely regrettable. n We will watch developments closely.” Industry Europe 25


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Sustainability tubed Linhardt

4min
pages 178-180

Delivering critical torque Brugola

4min
pages 160-161

Changing the face of packaging Schur Flexibles

3min
pages 166-169

Sealed-in success Herti

4min
pages 162-165

Wall-to-wall digital solutions Olbrich

4min
pages 170-173

Turning the tide Logoplaste

5min
pages 174-177

World-class heat treatment furnaces SECO/WAR

4min
pages 156-159

Connecting the world Prysmian Group

4min
pages 153-155

Turning the lights green Skanska

4min
pages 148-152

Profile of sustainable success Profilglass

4min
pages 144-147

Crowning glory Chelopech

5min
pages 137-139

Greater tunnel vision Leonhard Nilsen & Sonner

5min
pages 140-143

optimising exchange rates Valmex

4min
pages 134-136

First in eco-functionality OJ Electronics

5min
pages 130-133

Pioneering, hyper-clean modular solutions

5min
pages 126-129

Crystal clear versatility Franke Water Systems

4min
pages 123-125

Professional catering at your service

4min
pages 120-122

liquid assets Pentair

4min
pages 114-117

Technology on tap Celli Group

3min
pages 118-119

High-performance power solutions

4min
pages 110-113

more sustainable bio-mass solutions

5min
pages 107-109

luxury yachts from Poland Delphia Yachts

5min
pages 104-106

Where the grass is greener Tarkett

4min
pages 100-103

New name, new strategy Emmegi Group

4min
pages 97-99

A powerful brand beyond tyres Pirelli

6min
pages 92-96

Strong link BorgWarner

4min
pages 89-91

Customer-driven transformation Groupe PSA

7min
pages 84-88

In top gear ZF

5min
pages 77-83

Powerful, profitable solutions Ponsse

5min
pages 70-73

on track for multiple success

5min
pages 74-76

Polished performance Dacia

5min
pages 67-69

New energy to harvesting AGCO Feucht

4min
pages 64-66

Safety and performance VBG Group

5min
pages 58-60

Freight solutions specialist Bodex

4min
pages 61-63

Full speed ahead Michelin

4min
pages 54-57

Customised innovation Schwarzmueller

5min
pages 49-53

multi-axis materpiece SCM Group

6min
pages 44-48

Tools for better performance Hoffmann Group

4min
pages 40-43

Automation masterclass Alvey Group

5min
pages 37-39

Supreme filtration for a better environment

4min
pages 34-36

Focus on France Ian Sparks reports from Paris

4min
pages 27-28

Fluid progress ASSOFLUID

4min
pages 29-31

moving with the times D.R.A

3min
pages 32-33

Technology spotlight Advances in technology

4min
page 25

linking up Combining strengths

7min
pages 22-23

Winning business New orders and contracts

7min
pages 20-21

moving on Relocations and expansions across Europe

3min
page 24

Plastics news The latest from the industry

7min
pages 18-19

The rise of the cobots

5min
pages 8-9

Food & Beverage news The latest from the industry

7min
pages 14-15

Tackling the food waste crisis What can be done to

6min
pages 12-13

Single-use plastics ban: The lowdown What does it

5min
pages 16-17
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