Thursday , April 22 2021

Ghosn in the line of fire again as the Mitsubishi Motors board meets

TOKYO (Reuters) – Mitsubishi Motors Corp's board of directors will meet on Monday to remove Carlos Ghosn from his chairmanship after his arrest and departure from Nissan Motor alliance partner last week over alleged financial misconduct.

FILE PHOTO: Carlos Ghosn, president and CEO of the Renault-Nissan-Mitsubishi Alliance, participates in Tomorrow In Motion on the eve of the press day at the Paris Auto Show in Paris, France, on October 1, 2018. REUTERS / Regis Duvignau

The removal of Ghosn from Mitsubishi's eight-member plate, which meets at the automaker's headquarters in 1630 (0730 GMT), would end the presidency of the Japanese automakers amid dissatisfaction with the role of French partner Renault SA in the 19-year alliance.

Ghosn is the driving force behind the alliance that Renault and Nissan sealed in 1999 when the Japanese automaker was rescued from near bankruptcy. It was extended in 2016 to include Mitsubishi and allowed members to develop products together and control costs.

The alliance competes with Volkswagen AG (VOWG_p.DE) and Toyota Motor Corp to the ranking of the world's largest automaker.

Even when Nissan rebounded and grew rapidly, it remains a smaller partner in the shareholding structure. Renault holds 43% of Nissan and the Japanese automaker holds a 15% non-voting interest in the French company. And Nissan is almost 60% bigger than Renault in sales.

Top executives of the alliance are meeting in Amsterdam this week to protect their joint operations against the consequences of Ghosn's arrest as the power dispute between Nissan and Renault approaches. Renault refrained from firing him as president and CEO.

Nissan CEO Hiroto Saikawa told the team on Monday that power is very focused on Ghosn and that in the future better communication between board members and executives would help preserve independence and generate synergies between automakers , a Nissan spokesman said.

Ghosn was pushing for a deeper partnership, potentially including a complete merger between Renault and Nissan, at the request of the French government, despite strong reservations in the Japanese company.

Nissan pulled Ghosn off at a high-level meeting on Thursday after allegations of underestimating his income and using company money for personal use.

Ghosn denied the allegations, public broadcaster NHK said on Sunday.

His resignation from Mitsubishi Motors would mark the removal of the man credited with stabilizing the company after it was shaken by a cheating scandal in 2016.

Nissan holds a controlling stake of 34% in Mitsubishi Motors and has two executives on the board. The other director representative is CEO Osamu Masuko, who said last week that the alliance could be difficult to manage without Ghosn.

While automakers have emphasized that operations and business are occurring normally, Nissan has postponed the launch of its high performance Leaf electric car "to ensure that this important product launch can receive the coverage it deserves," said a spokesman of Nissan.

Shares of Mitsubishi Motors rose 3.3 percent, while Nissan rose 1.8 percent, surpassing the gain of 0.8 percent of the broader market.

Report of Maki Shiraki, Sam Nussey and Chang-Ran Kim; Edition by Muralikumar Anantharaman

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