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OPINION

Eye on France: Carlos Ghosn's trough of teriyaki

Carlos Ghosn in Paris, October 2018
Carlos Ghosn in Paris, October 2018 REUTERS/Regis Duvignau

Carlos Ghosn has now been in jail in Japan for a week, suspected of financial misdeeds at the Nissan-Renault-Mitsubishi empire he helped to build.

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Carlos Ghosn is running out of cars. Earlier today [Monday, November 26th] he was sacked from his job as boss of Mitsubishi Motors, having last Thursday been dumped by Nissan.

A trough of teriyaki

This leaves him with a battered Renault, the French part of the multi-national motor group which Ghosn used to direct, until he was arrested in Tokyo one week ago, accused of financial misdeeds, notably of under-declaring his personal income in company reports.

We’re not talking about the man’s income tax returns. This case is based on the details which all Japanese stock market companies are obliged to publish annually, with a view to informing potential investors. The boss signs off the statement, thus certifying the truth of the contents.

Japanese legal experts say the rule of thumb for this sort of financial fudging is the more you try to pull the wool over investors’ eyes, the more you are likely to suffer.

If the Nissan accusations were to be proved true - and Ghosn himself says it’s a total trough of teriyaki - we’d be talking something of the order of 39 million euros. Which is quite a lot of wool.

The Japanese public prosecutor’s office has said this is one of the most serious financial crimes, and could lead to ten years in prison.

Carlos Ghosn is still under investigation and has not been accused of anything.

Stand by your man!

For the moment, Renault and the Paris government (a 15 percent shareholder in the car maker) are standing by their man. The administrative body put in charge of Renault since Ghosn's arrest has ordered an internal audit to see if the charges stand up.

He can be kept in custody for another two weeks, 22 days being the legal limit for detention in this sort of case. Unless the Japanese authorities decide to widen the charges against him, adding 22 days behind bars for the investigation of each new alleged crime.

Analysts in Tokyo are suggesting that Japan, currently anxious to attract new foreign investment, won’t want to leave the man on bread and water for too long.

Last week, the Financial Times suggested that Ghosn had been shafted by Nissan board members worried about the man’s efforts to merge the three companies in the group more closely.

Hiroto Saikawa, Nissan’s chief executive, has repeatedly said he’s against a full merger between his firm and Renault. But from that to staging a sneaky palace revolution, especially one that caused Nissan shares to plunge nearly 6 percent in a single day, sounds like conspiracy theory.

But it’s interesting that, thanks to an internal reorganization, Saikawa recently took over the human resources files for the entire group, including those of Renault. And that evidence supporting the accusations against Ghosn seems to have been carefully collected between 2011 and 2015, possibly for use at the opportune moment.

Ghosn was to present his fusion plan at the next Nissan-Renault-Mitsubishi general assembly in June.

There’s to be a meeting of the company’s senior management to consider the crisis later this week. We should perhaps not expect too much to emerge from that, given the fact that this is part of an on-going police investigation. There's a limit to what people can say in public while the boys in blue are still sifting through evidence, currently said to be running to 400 pages. And the management dudes will also be worried about saying anything that could damage the share price of the world's third biggest car company.

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