France abandons Carlos Ghosn, calls for his dismissal as Renault CEO

France is turning on Carlos Ghosn almost two months after his shock arrest in Tokyo, eliminating one of the car titan's last potential allies within the global auto alliance he has held together for almost two decades. 

The French government has called for Ghosn's dismissal as chairman and chief executive officer of alliance member Renault SA, which refused to follow partners Nissan Motor Co and Mitsubishi Motor Corp in sacking the fallen car titan shortly after he was detained on November 19. France is the largest investor in Renault, which was caught unawares when Japanese prosecutors acted on allegations of Ghosn's financial misconduct over years at Nissan.   

"We are entering now a new phase," Finance Minister Bruno Le Maire said Wednesday evening in an interview with LCI Television. "In this new phase we need a new and durable governance for Renault."

French officials -- among them a Renault board member -- arrived in Tokyo to discuss the future of Renault's partnership with Nissan, in which it is the largest investor after bailing out the Japanese company about two decades back. The celebrated car executive's shock arrest at Tokyo's Haneda airport has jolted the world's biggest auto alliance, raising questions over whether their partnership will survive his downfall.

Renault's board will probably meet in coming days to replace him, people familiar with the matter said earlier, asking not be identified because the information isn't public. The board was spurred into action by Ghosn's failure this week to win bail, which points to a lengthy incarceration and would prevent him from carrying out his roles at Renault, they said.

While Ghosn's lawyers on Thursday appealed the latest bail rejection, they have previously acknowledged that he may stay in custody until his trial, which could be six months away. 

Ghosn has been indicted for understating his income at Nissan by tens of millions of dollars and transferring personal trading losses to the carmaker. Nissan has also accused Ghosn of misusing company funds, including over homes from Brazil to Lebanon and hiring his sister on an advisory contract. The executive has said he's innocent and has called the accusations "meritless and unsubstantiated". 

French officials are visiting Tokyo to discuss the future of the alliance between the automakers, government spokesman Benjamin Griveaux said earlier in Paris. The state's priority is to defend the "stability" of the partnership and the jobs it provides, he said.

The delegation includes Martin Vial, who heads the agency that oversees French state shareholdings and sits on Renault's board, and Emmanuel Moulin, Le Maire's chief of staff, a ministry spokesman said.

Renault and the French state had cited the principle of presumed innocence in backing Ghosn, while Nissan and smaller alliance partner Mitsubishi removed him as chairman. Accusations against Ghosn mounted this week, including a reported 7 million-euro payment ($8 million) from a Dutch entity named NMBV that is part of the manufacturing partnership he assembled between the three carmakers.

Nissan CEO Hiroto Saikawa was interviewed in the French press this week, defending his efforts to remove Ghosn and seeking to downplay the portrayal of the saga as a power struggle. Ghosn's arrest created a climate of suspicion between the companies.

While both firms have repeatedly said they are committed to the alliance, Nissan has long been unhappy about what it considers an outsized French role in the partnership. Renault has a 43 per cent voting stake in Nissan, which in turn owns just 15 per cent of the French company, with no voting rights.

Some Renault board members have concluded that a decision on Ghosn's position is needed fast, one of the people familiar with the matter said. There's no way Ghosn can stay in charge of Renault, no matter how the legal saga ends, the person said.

"Renault must realise Ghosn had stepped beyond what is appropriate," said Janet Lewis, a Tokyo-based auto analyst with Macquarie Group Ltd. "Too much power would appear to have accrued to one person, so it is important to try and develop a leadership team that can continue the work of the alliance."

A spokesman for Renault declined to comment on any possible changes in governance at the carmaker.

A spokesman for Nissan reiterated the company's internal investigation uncovered "substantial and convincing evidence of misconduct". The spokesman declined to comment on managerial decisions at Renault. Ghosn's lawyers, represented by Motonari Otsuru, had no comment.

The state has called for a Renault board meeting in the next few days, Le Maire said. Interim CEO Thierry Bollore's mandate could be made more permanent, while Michelin CEO Jean-Dominique Senard is the leading candidate to become chairman, one of the people told Bloomberg.

Le Maire, asked about Senard in the TV interview, described him as a "great industrial manager".