Saturday , May 8 2021

Nissan chief executive says Renault alliance 'imbalanced'

Nissan's chief executive, Hiroto Saikawa, has told employees that the company's alliance with France's Renault has been "imbalanced", saying the concentration of power in the outlawed president had been an open dialogue.

Mr Saikawa told a packed hall at Nissan's Yokohama headquarters that the company will work to make the relationship "sustainable" in his first comments to staff since Mr Ghosn's arrest last week.

The 30-minute speech came as Mr Ghosn prepares for a prolonged fight to clear his name, according to two people briefed on the situation, in a country where odds are heavily stacked in favor of prosecutors.

New York-based law firm Paul, Weiss, Rifkind, Wharton & Garrison has been hired to represent Mr Ghosn. Motonari Otsuru, the former Japanese prosecutor, who is known for overseeing the investigation of accounting fraud at internet company Livedoor, will also represent the 64-year-old head of the Renault-Nissan-Mitsubishi Alliance, according to people familiar with the appointment.

Mr Otsuru was not immediately available for comment.

Ghosn will spend a minimum of 20 days under investigation at the Tokyo Detention Center, and legal experts warn he could be there for much longer.

Mr Ghosn and Greg Kelly, another Nissan board member, have been arrested and accused by prosecutors of subduing Mr Ghosn's salary by $ 44m over five years in financial statements. The Japanese carmaker said the internal investigation, sparked by a whistleblower, found that Mr Ghosn had made personal use of the company funds and identified Mr. Kelly as "the mastermind" of the alleged misconduct.

Mr Ghosn was dismissed as chairman of the board and Mr Kelly was stripped of his responsibilities.

Tokyo prosecutors are also looking into whether Mr Ghosn correctly reported deferred compensation he was set to receive after retirement, according to people with knowledge of the investigation.

Mr Ghosn has denied Tokyo prosecutors that he intentionally understated his pay in financial documents, according to NHK, the Japanese broadcaster.

Mr Ghosn and Mr Kelly could not be reached for comment. Neither has been formally charged with any crime.

Mr Saikawa told the staff that he plans to meet this week with Thierry Bolloré, Renault's chief operating officer who has been appointed deputy chief executive on a temporary basis, and Osamu Masuko, chief executive of Mitsubishi, according to a person who heard the Nissan CEO's address .

"Even after Mr Ghosn [is gone], we need to keep this alliance sustainable, "Mr Saikawa said, according to the person.

His comments came as Mitsubishi Motors, the alliance's third partner, looks set to follow his Japanese peer and removes the ex-chairman from his board at a board meeting on Monday afternoon, mirroring Nissan's move last week.

At the time of his arrest, Mr Ghosn was planning a merger of Renault and Nissan, a move that the Japanese carmaker opposed and was looking to block.

Since its rescue by Mr Ghosn from the brink of bankruptcy in the early 2000s, Nissan has become the largest of the two companies, with its profits contributing more than half of Renault's € 5.2bn net profit last year. Yet the French company has 43 percent of Nissan's shares and voting rights, compared to the Japanese 15 percent non-voting stake in the Renault group.

Legal experts say Japan's new plea-bargaining system will make it easier for prosecutors to collect evidence in a country where it already enjoys a 99 percent criminal conviction rate. The new system will mean staff at companies with operations in Japan will have an incentive to co-operate with investigators to avoid charges or get a reduced sentence.

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