Renault SA (RNLSY) shares rose for the first day in three Wednesday after the automaker appointed an interim leadership team to stand in for Carlos Ghosn, the former CEO who reportedly remains under arrest in Japan as part of a broader investigation into allegations of financial misconduct linked to his role as chairman at Nissan Motor Co. (NSANY)
Renault's chief operating officer, Thierry Bollore, will assume the role of CEO immediately, the company said, following comments from France's Economy Minister, Bruno Le Maire, who said the carmaker, in which the French state has a 15% stake, was "weakened" by Ghosn's arrest and needed to "act quickly" in replacing him. Le Marie, however, echoed sentiments from Nissan that the pair wished to consolidate their Euro-Pacific alliance and said talks will continue between the two companies later today.
"At this stage, we do not have any evidence to support the accusations against Mr Carlos Ghosn," Le Maire told reporters Wednesday. "I would like to emphasize the Renault board's request that Nissan share all the evidence available to it."
Renault shares were marked 2% higher in the opening hour of trading in Paris, well ahead of the 0.7% gain for the CAC-40 benchmark, and changing hands at €59.51 each in a move that trims their three-day decline to around 10%.
"Mr. Ghosn, temporarily incapacitated, remains Chairman and Chief Executive Officer," Renault said in a statement. "During this period, the board will meet on a regular basis under the chairmanship of the lead independent director."
Japan's Kyodo newspaper reported Wednesday that Ghosn, who was stopped by police Monday as he entered Japan for a series of meetings, will be detained for ten days while authorities investigate allegations that the 64-year old misstated income from his role as Nissan chairman and mis-used company funds an investigation in cooperation with Japan's Public Prosecutors Office.
Nissan is due to hold a special meeting Thursday to discuss Ghosn's future with Japan's second-largest automaker. However, the larger questions his arrest, and possible departure, surround the fate of the alliance he helped forge between Renault and its larger partner.
"Because the significant acts of misconduct that were uncovered through our internal investigation constitute clear violations of their duty of care as directors, the Chief Executive Officer will propose to the Board of Directors to quickly remove Carlos Ghosn from his positions as Chairman and Representative Director," Nissan said in a statement. "Our company has been providing information to the Public Prosecutors Office, and have been fully cooperating with their investigation."
Renault owns 43% of Nissan, which sells far more cars each year, and only has a 15% sake in the French -- equal to that of the French government -- in return. And while Japan's chief cabinet secretary, Yoshihide Suga, told reporters Wednesday that it was important to maintain the alliance, some investors are wondering if Nissan may wish to extract itself from the tie-up in order to unlock some of the value trapped in the Ghson-led arrangement.
Nissan shares closed 0.36% higher in Tokyo at 951.1 yen each, but had fallen some 15% so far this year, a move accelerated by slumping North American sales and one of the weakest quarterly earnings reports in nearly 10 years over the three months ending in September.
Ghosn stepped down from his role as CEO of Nissan last year as the 64-year old began paring back his position as the world's most visible auto executive amid escalating tensions with the French government, which owns a 15% stake in Renault, and shareholder pressure to either merge its alliance with Nissan or deepen ties between the two auotmakers and Mitsubishi.
His 2017 payout, which included €7.4 million from Renault and €9.2 million over his final year at the helm of Nissan, was also approved following a 56% to 43% vote by shareholders even as the French government, which owns a 15% stake, rejected the compensation plan.
Ghosn won backing for another four-year term at the held of the Renault board in June, and told La Figaro newspaper in Paris that a plan for the future of the three-way alliance would be revealed "well before the end of my term, or even rather at the start."