December 11, 2018 / 10:34 PM / 5 months ago

France claims ignorance as Nissan's Ghosn dossier adds pressure

PARIS (Reuters) - The French government said on Tuesday it remained unaware of detailed allegations against Renault SA (RENA.PA) boss Carlos Ghosn sent to the carmaker a day earlier by Japanese alliance partner Nissan Motor Co Ltd (7201.T).

FILE PHOTO: Carlos Ghosn attends the Tomorrow In Motion event on the eve of press day at the Paris Auto Show, in Paris, France, October 1, 2018. REUTERS/Regis Duvignau/File Photo

Ever since Ghosn’s Nov. 19 arrest in Japan, the French government, Renault’s biggest shareholder, has been demanding to see the findings of a Nissan internal investigation that include allegations of financial misconduct by its chairman.

Ghosn was indicted on Monday along with Nissan and alleged co-conspirator Greg Kelly for failing to declare $43 million in deferred income he had agreed to receive, in addition to the $44 million he was paid for the five years ending in March 2015.

Renault’s board meets on Thursday Dec. 13 amid mounting pressure to dismiss Ghosn as chairman and chief executive. Ghosn’s declared salaries at Renault and Nissan have been politically sensitive in France, where President Emmanuel Macron is now battling street protests that have shaken his government.

Macron and Finance Minister Bruno Le Maire had issued calls for Nissan to share findings from its months-long investigation.

“We’re not going to propose that Mr. Ghosn step down for the simple reason that we don’t have any evidence,” Le Maire said on Nov. 21, two days after the car executive’s surprise arrest.

Nissan, which ousted Ghosn the same week, finally communicated its 400-page dossier on Ghosn’s alleged misconduct to its 43.4 percent-owner Renault via lawyers on Monday, French daily Les Echos and other media reported. A Renault spokesman would not confirm reception of the Nissan findings.

LEGAL CHANNELS

French officials acknowledged that the dossier had been received by Renault, however - while maintaining that the government remained unaware of its content.

Renault had requested that the findings be shared under a strict legal procedure that “required the agreement of the Japanese prosecutor”, a government source said.

“For the moment we don’t have the detailed contents of these documents so we can’t take a position.”

The French finance ministry declined to comment.

France holds a 15 percent stake in Renault and two board seats. While Nissan also owns 15 percent of its French parent, the holding commands no voting rights.

Martin Vial, who heads the French state shareholdings agency, has been in daily contact with fellow Renault board members including interim Chairman Philippe Lagayette since Ghosn’s arrest, sources close to the situation say.

The boardroom crisis has shaken the foundations of the Renault-Nissan alliance, with Nissan CEO Hiroto Saikawa calling for changes to weaken the French parent’s control.

Under French government pressure, Ghosn had been exploring a deeper tie-up or even a full merger between Renault and Nissan, despite strong reservations at the Japanese carmaker.

DEFENSE ARGUMENTS

Whether or not they broke the law, Ghosn’s undisclosed compensation plans - effectively doubling his total Nissan package - could be politically explosive in France, especially if the government failed to act upon their discovery.

Defense arguments advanced by Ghosn’s lawyers and supporters have not contested the plans’ existence. His Japanese lawyer Motonari Otsuru said in a media statement that the compensation agreements had not been properly ratified.

Ghosn’s defense partly rests on the contention that his deferred compensation arrangements were vetted internally and by outside consultants, people familiar with the matter said.

Pressure for his formal dismissal from Renault appeared to be growing in the wake of the Japanese indictments.

Officials from two centrist Renault unions, the CFDT and CFE-CGC, are privately urging management to replace Ghosn permanently, sources said - joining the leftist CGT, which was quick to call for leadership change after his arrest.

“Whether or not he’s found guilty, his image among staff is so tarnished that I can’t imagine him returning to his post,” said an official with one of the moderate labor groupings.

“It’s not easy to oust him without appearing to prejudge the case - but that’s really a communication problem now.”

Reporting by Laurence Frost; Additional reporting by Mike Spector in New York; Editing by Lisa Shumaker

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