Renault keeps Ghosn as CEO despite arrest in Japan

‘Mr. Carlos Ghosn, temporarily incapacitated, remains chairman and chief executive officer,’ a statement from Renault’s board said. (AFP)
Updated 21 November 2018
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Renault keeps Ghosn as CEO despite arrest in Japan

  • Renault’s board said its decision was made with an eye toward keeping the company on a steady course
  • Renault and Nissan have a partnership with smaller automaker Mitsubishi Motor Corp

TOKYO: France’s Renault says it has decided to keep its CEO Carlos Ghosn on despite his arrest in Japan on allegations that he misused assets of partner Nissan Motor Co. and misreported his income.
Renault’s board of directors announced late Tuesday that the No. 2 at the company, Chief Operating Officer Thierry Bollore, would temporarily fill in for Ghosn.
“Mr. Ghosn, temporarily incapacitated, remains chairman and chief executive officer,” a statement from Renault’s board said. But while Ghosn deals with his legal issues in Japan, Bollore will have the same authority to run the company as the CEO, it added.
Renault’s board said its decision was made with an eye toward keeping the company on a steady course “to preserve the interests of the group and the continuity of its operations.”
Ghosn runs Renault, Nissan and the Renault-Nissan-Mitsubishi alliance that he helped turn into the world’s biggest car-seller last year, and both France and Japan want to keep it intact.
Renault’s move to appoint a temporary leader was in line with a demand by the French government, which owns a 15 percent stake in the automaker. Finance Minister Bruno Le Maire had said earlier Tuesday that Ghosn was not in position to lead the Renault Group while fighting the accusations in Japan.
The French automaker said after an emergency meeting of its board of directors in Paris that it would further consolidate its alliance with Nissan. The two automakers have a partnership, also, with smaller automaker Mitsubishi Motor Corp.
Asked about reports that Nissan and Renault had been on the verge of merging, Nissan’s CEO Hiroto Saikawa told reporters Wednesday that he had not heard of such a plan.
There was no update Wednesday in Tokyo from prosecutors on Ghosn’s case, and no public word from Ghosn himself. It was unclear where he was being held following his arrest on Monday.
Nissan’s board of directors is due to meet Thursday and expected to approve a proposal to dismiss both Ghosn as its chairman and another executive, representative director Greg Kelly, who is alleged to have collaborated with his boss in falsifying financial reports.
Earlier this year, Ghosn signed a contract that would have run through 2022.
Renault’s board, meanwhile, said it is requesting that Nissan pass along details of its investigation into Ghosn’s alleged wrongdoing. Le Maire said authorities have examined Ghosn’s tax situation in France but have found no wrongdoing.
Japanese prosecutors said they were holding Ghosn, 64, for allegedly collaborating to falsify securities statements and underreporting $44.6 million in income from 2011 to 2015.
Bollore, a member of Renault’s executive committee, joined Renault in September 2012 and was named chief operating officer only last February. He has a long career with both tiremaker Michelin and auto parts company Faurecia, spending time in Asia with each.
Of French, Brazilian and Lebanese background, Ghosn is a towering corporate figure in France, where Renault is one of the heavyweight industrial survivors.
He is more controversial in Japan, where top foreign executives are rare and even the biggest corporate bigwigs tend to keep a low profile.
Ghosn is admired for driving a turnaround at Nissan when it was near bankruptcy and for his foresight in pushing to bring electric and autonomous cars to the masses.
But in a 90-minute news conference late Monday night, Saikawa, the Nissan CEO, said his boss had too much power and the company was overdue for some change.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.