Nissan chief says Ghosn arrest an ‘opportunity’ to review alliance

Nissan’s chief executive has called the ousting of Carlos Ghosn “a good opportunity” to review the Japanese carmaker’s alliance with Renault in comments to staff that are likely to unnerve its French partner.

In his first comments to employees since Mr Ghosn’s arrest and dismissal as chairman last week, Hiroto Saikawa pointed to the unbalanced nature of the alliance and said there had been too much power concentrated in Mr Ghosn.

“When Carlos Ghosn was here, no matter what we discussed with Renault, we often did it through him,” Mr Saikawa said, according to a person who heard him speak at a packed hall at Nissan’s Yokohama headquarters on Monday. “We actually see this as a good opportunity to explore how the alliance can be healthy and sustainable into the future.”

Renault and the French government have said they want to retain the status quo while Mr Ghosn is held in a Tokyo jail on suspicion of understating his pay in financial reports. Renault has appointed an interim leadership team but has maintained that Mr Ghosn will remain chairman and chief executive.

Adding to the Japanese-French divide, Mitsubishi Motors, the third member of the alliance, echoed the comments of Mr Saikawa. After ousting Mr Ghosn as chairman on Monday, Osamu Masuko, said there would be a review of the alliance.

Following a one-hour board meeting on Monday, Mitsubishi said Mr Masuko would take over as interim chairman, while the company stressed the alliance would continue to evolve even in the absence of Mr Ghosn.

Mitsubishi joined the Renault-Nissan alliance in 2016 after Mr Ghosn played a central role in orchestrating a deal where Nissan injected $2.3bn into the smaller Japanese rival as it was struggling to survive a scandal over inflated fuel economy data.

“It was an agonising decision,” Mr Masuko, who had close ties with Mr Ghosn, told reporters after the meeting. “We had no choice but to prioritise what we needed to do to protect our company and our employees and their families.”

Mr Ghosn and Greg Kelly, another Nissan board member, were arrested and accused by prosecutors of understating Mr Ghosn’s salary by $44m over five years in financial statements.

The Japanese carmaker said an internal investigation, sparked by a whistleblower, found that Mr Ghosn had made personal use of company funds, and identified Mr Kelly as “the mastermind” of the alleged misconduct.

The top executives of the three carmakers are expected to exchange opinion on the future of the alliance at a regular meeting scheduled for later this 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, according to people familiar with the matter.

Questions on the alliance comes as Mr Ghosn prepares for a prolonged fight to clear his name, according to two people briefed on the situation, in a country where the odds are heavily stacked in favour 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 famous 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.

Previous cases suggest it is highly likely Mr Ghosn will spend a minimum of 20 days under interrogation at the Tokyo Detention Centre, and legal experts warn he could be there for much longer.

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

Mr Ghosn has denied to 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.