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FRANCE-JAPAN-AUTOMOBILE-RENAULT-NISSAN-GHOSN
Renault audit finds no fraud yet as Ghosn learns fate
PARIS, Jan 11, 2019 (BSS/AFP) – The board of French automaker Renault on
Thursday said an ongoing audit into executive pay had found no sign of fraud
in the last two years, as CEO Carlos Ghosn could face fresh charges in Japan.
Directors gave no hint in their statement of any deliberations into Ghosn’s
future at Renault, as Japanese prosecutors reportedly prepare to press new
formal charges likely to keep the once-towering auto boss behind bars.
The Renault meeting comes two days after Ghosn made his first court
appearance over alleged financial impropriety during his years as head of the
carmaker’s alliance partner Nissan.
Renault’s board said an independent review had looked into the compensation
of the group’s executive committee during the financial years 2017 and 2018
“and has concluded that it is both in compliance with applicable laws and
free from any fraud”.
But the board statement added that the audit would continue, with previous
years scrutinised as it progresses.
Ghosn, who has been Renault CEO since 2005, has been languishing in a Tokyo
detention centre for more than 50 days as he fights multiple allegations of
financial misconduct.
The 64-year-old has been formally charged with under-declaring his income
by tens of millions of dollars in an apparent bid to quash accusations he was
overpaid.
He also faces questioning in connection with alleged attempts to transfer
personal investment losses to Nissan and making unnecessary payments to a
Saudi associate from company funds.
Ghosn’s requests Tuesday to be released before trial were rejected by a
judge who declared he was a flight risk.
One of his lawyers later conceded that Ghosn could spend a further six
months behind bars before his case comes to trial.
Japanese media reports have suggested new charges could be levied against
him on Friday, which could ensure he remains jailed.
He may be accused of understating his salary from 2015 to 2018, three years
more than the original charge that he under-reported some five billion yen
($44 million) in income over five years from 2010.
He could also face charges for breach of trust, reports say.
The claims have heightened worries over the viability of keeping him on as
Renault’s chief executive.
– New revelations –
French daily Le Figaro reported Thursday that the board meeting was one of
several informal gatherings held regularly since Ghosn’s arrest to discuss
developments in the case.
Nissan said earlier that its board had also met Thursday, when directors
had received “an updated report” on its own investigations into Ghosn’s
alleged misconduct.
Nissan last weekend put two executives close to Ghosn on leave of absence,
suggesting that the internal investigation into the alleged misconduct could
be spreading.
Jose Munoz, the chief performance officer, and human resources head Arun
Bajaj have not been replaced during their absences.
Nissan as well as Mitsubishi, the third alliance partner, have removed
Ghosn as chairman, but Renault has kept him on while appointing a deputy CEO
to ensure day-to-day management.
The French automaker has said internal investigations have found no signs
of wrongdoing by its chief during his tenure.
But pressure on Ghosn rose further Thursday after French daily Liberation
reported that he had not been paying French income taxes since 2012, after
moving his fiscal residency to the Netherlands.
Both Renault and the French economy ministry declined to comment, but it
was an unwelcome revelation for the head of a company in which the French
state owns a 15-percent stake.
“The leader of a French company should pay his taxes in France,” President
Emmanuel Macron said in a speech last month.
– Chance of bail? –
Japanese media, citing Ghosn’s lawyers, said Thursday that he was suffering
from a high fever and unable to meet investigators for questioning.
At his dramatic court appearance on Tuesday, Ghosn appeared to have lost a
lot of weight in detention but otherwise seemed in good health.
“I have been wrongly accused and unfairly detained based on meritless and
unsubstantiated accusations,” the once-revered car titan told the court.
In a career spanning decades, during which he won praise for turning around
a struggling Nissan, he said he had “always acted with integrity” and had
never before been accused of any wrongdoing.
But afterwards Ghosn’s lawyer said it would be “very difficult” to win bail
and it could be months before his case is heard.
The French government has stood by Ghosn so far, saying he must benefit
from the presumption of innocence.
But Transport Minister Elisabeth Borne told French radio this week that
“obviously, if this situation continues we’ll have to draw the consequences.”
BSS/AFP/GMR/0834 hrs