Renault plans internal audit of Ghosn's compensation

PARIS -- Renault said it is beginning its own internal audit to examine Chairman Carlos Ghosn's compensation in the wake of the scandal leading to his ouster at Nissan and Mitsubishi over the past week. 

The audit will reportedly be overseen by Claude Balard, a former national police official who is now director of ethics at Renault.

Renault's vice president for audit, risk and organization, Farid Aractingi, was a classmate of Ghosn's in Lebanon in the 1960s.

Meanwhile, the reaction in France to news of Ghosn's arrest last week on accusations that he failed to report tens of millions in income from Nissan and misused company funds can be summed up in two words: It's complicated.

Ghosn's arrest appears to have come as a surprise to Renault and the French government, Renault's largest shareholder. In the past week, both have gone into damage-control mode, with the government expressing its support for the Renault-Nissan-Mitsubishi alliance, and Renault appointing a co-CEO to assume Ghosn's duties.

Notably, however, neither the government nor Renault officials have offered a personal defense of Ghosn. Bruno Le Maire, the finance minister, said that Ghosn was not in a position to continue leading the Renault, and he has repeatedly expressed the hope that the Renault-Nissan-Mitsubishi-alliance -- which he described as "indispensable" on Sunday -- be preserved.

Ghosn and another Nissan director accused of being the "mastermind" behind the purported scheme to siphon off money, Greg Kelly, have maintained their innocence, according to news reports. The two remain in Japanese custody.

Conspiracy theories

Nissan CEO Hiroto Saikawa has asserted repeatedly that Ghosn had amassed too much power during his nearly two decades as alliance leader -- in posts that included CEO of Renault and Nissan at the same time, and as chairman of Renault, Nissan, Mitsubishi and of the board that oversees the alliance as a whole. Saikawa, and Nissan, have reportedly been seeking to change the alliance's structure to terms more favorable to the Japanese partner.

The information discovered during an internal investigation triggered by a whistleblower was so definitive that immediate action had to be taken to remove Ghosn from leadership at Nissan, Saikawa said at a news conference the day of Ghosn's arrest. "Do not take this as a coup d’etat," he said.

But in the immediate wake of the arrest, that is exactly how many in the French media portrayed it. Numerous articles raised the possibility that Ghosn's arrest was the result of a "complot," or conspiracy, at Nissan.

As evidence, commentators pointed to a lack of information about any charges against Ghosn; the harsh words that Saikawa had for Ghosn, his former mentor; and that the arrest came as Ghosn was reportedly working to change the structure of the alliance, perhaps even seeking to engineer a merger -- which Nissan has strongly opposed.

Among the headlines: "Is the Ghosn affair a coup d'etat fomented by Nissan?"; "Carlos Ghosn in prison: scandal or conspiracy?"; "Carlos Ghosn: Is the theory of a conspiracy credible?"

Le Maire, the finance minister, has played down any suggestions of a plot to depose Ghosn. "I do not believe in the conspiracy theory," he said Sunday.

For unions, worry and anger

The three main unions that represent Renault workers have expressed concern for their employees, with national leadership taking a relatively measured tone. The largest union at Renault, the CFE-CGT, said it hoped that "all measures would be taken to preserve the interests of Renault Group and the Renault Nissan Mitsubishi alliance."

Local chapters, however, have pulled few punches, denouncing Ghosn and calling for new leadership at Renault. The CGT union's chapter at the Renault factory in Flins, which makes the Renault Clio and Zoe, and Nissan Micra, decried the "indecency" of Ghosn, who despite receiving a combined 15 million euros in compensation from Renault and Nissan combined, "still wanted more."

If Ghosn did indeed "trick" Nissan by concealing his salary, the union said in a statement, "one wonders whether such a fraud" also happened in France.

"The legitimacy of Carlos Ghosn is largely tainted," the union said, adding that the management of Renault should be reformed "in favor of a real industrial strategy, concerned with the development of the company, employment and social conditions that must take precedence over the needs of shareholders."

Some frustration, however, is beginning to seep through the official response. While announcing the news of the internal audit Sunday on French broadcaster BFM, Finance Minister Bruno Le Maire noted pointedly that neither Renault nor the French government had received information about the accusations against Ghosn.

"I wish we had these charges faster," Le Maire said. "Today, we have no evidence."