Renault Is Nearing First Conclusions in Ghosn Probe

(Bloomberg) -- Renault SA is aiming to reach in about a week the first conclusions of an internal probe into whether the pay packages of Carlos Ghosn and other top managers of the French carmaker were properly disclosed, according to people familiar with the matter.

The ongoing investigation focuses on their salaries and other benefits at Renault, where Ghosn remains chief executive officer and chairman, said the people, who asked not to be named because the information isn't public. The probe is being led by Eric Le Grand, a former head of security who was recently appointed as an ethics and compliance officer, and another Renault insider, Claude Baland, a 68-year-old former top civil servant, they said.

Ghosn is in custody in Japan after his Nov. 19 arrest on allegations of under-reporting of his income at Nissan Motor Co., which has since ousted him as chairman. Prosecutors are set to indict him for financial crimes as soon as Monday, people familiar with the matter told Bloomberg News.

While he remains at the helm of Renault, he has been replaced on an interim basis. Tension within the Franco-Japanese partnership held together by Ghosn for two decades has all but exploded into the open since his incarceration.

French Finance Minister Bruno Le Maire announced Renault's internal audit on Nov. 25, saying it would take “a few days” and look into Ghosn's pay package and his use of company assets. The state is the carmaker's most powerful shareholder and has criticized Ghosn's compensation for years as too high. It was lowered to 7.4 million euros ($8.4 million) in 2017.

Growing Distrust

Renault executives are suspicious of Nissan's motives, demanding to see the Japanese carmaker's proof of the allegations against Ghosn, the people said. Nissan offered up a presentation summarizing alleged transgressions, but Renault declined, requesting the presence of lawyers and the full report on the allegations, they said.

A spokesman for Renault said Nissan still has not provided the evidence Renault's board has asked for. He declined further comment. A spokesman for Nissan didn't immediately return a request for comment. Renault's Baland and Le Grand didn't respond to requests for comment.

Renault and Nissan have complicated cross-shareholdings and poor relations will make operations difficult. The French carmaker is the largest shareholder of Nissan and has voting rights, while the Japanese company is the second-largest shareholder in Renault, with no votes. The Japanese automaker is keen to equalize power but its demands have been stonewalled by Renault and the French state.

Renault has two representatives on Nissan's board and on Tuesday it failed to name a new chairman to replace Ghosn.

Renault's interim leadership could last a couple of months unless Ghosn is found guilty, or serious allegations against him are uncovered, one of the people said. The company named Thierry Bollore as interim CEO and the duties of chairman are being performed by director Philippe Lagayette. Ghosn remains the chairman of Amsterdam-based Renault-Nissan-Mitsubishi alliance.

To contact the reporter on this story: Ania Nussbaum in Paris at anussbaum5@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel

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