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France warns against 'exorbitant' payoff for ex-Renault boss Carlos Ghosn

Ghosn resigned from his Renault role last week under pressure from the French government following his arrest in Japan


Carlos Ghosn, among the most prominent auto-industry leaders globally and CEO of Renault SA, was detained over a suspected breach of Japanese financial law

France's finance minister said on Sunday a severance package for former chief Carlos Ghosn, forced to resign in a financial scandal, should not be "exorbitant" and that the French state would follow the matter closely.

Renault, which this week appointed a chairman and chief executive tandem to replace Ghosn, has yet to finalise its former boss' severance package, a potentially explosive issue in France where the government is facing protests over low pay and inequality.

"No one would understand if the severance pay of were exorbitant," Bruno told France Inter radio.

"We are going to be extremely vigilant." The French state is Renault's largest shareholder, with a stake of around 15 per cent, and holds two board seats.

resigned from his role last week under pressure from the French government following his arrest in in November and indictment there for financial misconduct.

He denies any wrongdoing.

The scandal has strained Renault's alliance with Japan's Nissan, an industrial partnership built into a global carmaking giant over two decades.

France's CGT union has estimated Ghosn's severance package is worth 25-28 million euros ($28-32 million), in addition to an annual pension of 800,000 euros.

declined to say what he thought would be an acceptable pay-off for Ghosn, but said the government had previously succeeded in getting Ghosn's 2018 pay package reduced by 30 percent from his 2017 total of 7.4 million euros.

The finance minister also said he would propose in the coming months legislation to require bosses of large companies based in France to make the country their tax domicile.

The changes would target in particular big firms listed on the CAC-40 and SBF-120 indexes on the Paris stock market, along with groups in which the state has a holding, said.

The legislation would include sanctions for company chiefs that breached the rule, he added.

First Published: Sun, January 27 2019. 20:29 IST