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  HOME | Business & Economy (Click here for more)

Angry Letters and Lawyers: Nissan, Renault Duel after Ghosn Arrest

PARIS – Tensions stemming from the investigation into auto-industry titan Carlos Ghosn are hampering efforts at Renault and Nissan to shore up their globe-spanning alliance.

In recent weeks the two carmakers have taken steps to restore the trust that people at both companies say was lost on Nov. 19, when Ghosn, then the chairman of both businesses, was arrested on suspicion of financial misconduct after a monthslong probe that Nissan conducted in secret. Ghosn has denied any wrongdoing.

Renault last month chose a company outsider, Michelin Chief Executive Jean-Dominique Senard, to become the French car maker’s new chairman, granting him a mandate to reset relations with its Japanese partner. It also named Thierry Bollore, Renault’s deputy chief executive officer, to take over as CEO.

A Nissan shareholder meeting on April 8 in Tokyo will allow Senard to replace Ghosn as a director on the Nissan board.

The moves set the stage for the companies to renegotiate the terms of their alliance, according to people familiar with the matter, including the delicate matter of how to rebalance cross-shareholdings that have long given the French automaker an upper hand in the partnership. Renault, the smaller of the two companies by revenue, owns 43 percent of Nissan, while Nissan owns 15 percent of Renault through shares that lack voting rights.

“We first need to restore trust,” said one person close to Renault’s board.

Nissan Chief Executive Hiroto Saikawa said Tuesday that Nissan and Renault “will be able in April and May to discuss the next steps” for their alliance once Nissan holds its special shareholder meeting.

Both sides have a lot to lose if the alliance falters. The companies say the partnership, which also includes Japan’s Mitsubishi Motors Corp., generated 5.7 billion euros ($6.51 billion) in cost savings in 2017. Last year, the partnership produced one out of every nine light vehicles sold worldwide.

Standing in the way of further rapprochement, however, is Nissan’s continuing investigation of Ghosn and Renault’s anxieties about it. The internal probe paved the way for Japanese prosecutors to charge Ghosn with underreporting his compensation in eight years of Nissan financial statements and causing Nissan to pay the company of a Saudi Arabian friend who helped him with a personal financial problem.

Ghosn has told a Japanese court the allegations are meritless and unsubstantiated.

Shortly before Christmas, lawyers representing Renault received a briefing from Nissan lawyers. Nissan investigators have sought to interview Renault executives and review their files, according to a person familiar with the matter. That is fueling concerns at Renault that their executives risk becoming entangled in the probe or that confidential company documents could end up in the hands of Japanese authorities, the person said.

Renault followed up by sending an 82-page document to Nissan lawyers, questioning the scope and methodology of the probe, according to people familiar with the matter. Renault wanted to know whether Nissan shared confidential company documents with Japanese officials and whether Nissan employees signed any agreements with Japanese authorities giving them immunity from prosecution, one of the people said.

A Nissan spokesman said the investigation was being conducted “with the sole intention of discovering the truth” and that the company “has always welcomed an open and direct dialogue with its partners to help uncover relevant facts.”

Nissan executives say Renault dragged its feet as the Japanese vehicle maker moved to widen the investigation to the alliance’s holding company, Renault-Nissan BV. Last month, the two sides agreed to hire an independent investigator that is expected to look into the roughly 20 million euros the holding company spent on consultants in both 2015 and 2016, the two most recent years for which RNBV’s accounts have been filed, said a person familiar with the matter.

Renault officials say the French carmaker wants to ensure the probe of the Netherlands-based holding company is done properly.

On Jan. 16, Renault lawyers sent a letter to Nissan expressing concern about Hari Nada, a senior vice president in charge of Nissan’s legal department and CEO office. The letter questioned whether Nada faced a conflict of interest in remaining the point of contact between Renault and Nissan’s senior management while also being involved in the origins of the probe.

The letter cited a report in The Wall Street Journal describing how Nada helped Nissan surreptitiously gather evidence against his boss and then laid the groundwork for an elaborate operation to arrest Ghosn on a Tokyo tarmac.

“Nada’s continuing involvement in the matter on behalf of Nissan, while he is purported to have acted as a whistleblower, raises highly problematic issues regarding the fairness and the sincerity” of the probe, Renault’s lawyers wrote, according to excerpts of the letter reviewed by The Wall Street Journal.

Nada couldn’t be reached for comment, and the Nissan spokesman said he wasn’t available for comment.

As recently as Jan. 4, Nada emailed Bollore, Renault’s deputy CEO at the time, to inform him that Jose Muñoz, a top lieutenant of Ghosn at Nissan, had gone on a leave of absence, according to the letter. Nada also requested in the email that Renault refrains from contacting Muñoz, the letter said.

“This pattern of behavior puts in question the motivation and objectivity of Nissan’s investigation, making it appear more like a political campaign than a neutral fact-gathering exercise,” the Renault letter states.

The Nissan spokesman said Renault’s concerns have “already been reviewed and fully addressed in a series of verbal and written responses from Nissan’s external attorneys,” adding that Nissan remains “firmly committed to compliance with all applicable legal and ethical standards.”

 

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