November 20, 2018 / 7:59 AM / 22 days ago

Ghosn in no position to lead Renault, says French finance minister

PARIS (Reuters) - Carlos Ghosn should not remain in charge of Renault (RENA.PA) after his arrest in Japan, France’s finance minister said on Tuesday, urging the carmaker to move swiftly to install an interim management team to limit the damage.

FILE PHOTO: Carlos Ghosn, chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, attends a press conference on the second press day of the Paris auto show, in Paris, France, October 3, 2018. REUTERS/Regis Duvignau/File Photo

Ghosn, one of the best known leaders in the car industry, was arrested in Japan on Monday after Renault partner Nissan (7201.T) said he had engaged in wrongdoing including personal use of company money and under-reporting how much he was earning for years. Nissan plans to oust him as chairman on Thursday.

“Carlos Ghosn is no longer in a position where he is capable of leading Renault,” Finance Minister Bruno Le Maire told France Info radio.

“Nevertheless, we have not demanded the formal departure of Ghosn from the management board for a simple reason, which is that we do not have any proof and we follow due legal procedure,” added Le Maire.

The French state owns 15 percent of Renault, which in turn holds a 43.4 percent stake in Nissan.

Le Maire also called on Renault’s board to meet “in the coming hours” to set up an interim management structure in light of the arrest of Ghosn, who is chairman and chief executive.

The board will meet later on Tuesday, a company spokesman said.

It will discuss temporarily replacing Ghosn while he remains in detention in Japan sources familiar with the matter told Reuters.

Le Maire said he would contact his Japanese counterpart over the matter, and reiterated that France’s priority was to ensure the stability of the Renault company.

Le Maire added that Renault’s partnership with Nissan was in the interests of both France and Japan and of both companies.

“Renault has been weakened, which make it all the more necessary to act quickly,” said Le Maire.

Renault shares were down 2.8 percent in early session trading, with the stock having slumped 8.4 percent on Monday.

Bank of America Merrill Lynch cut its rating on Renault to “neutral” from “buy”, while Exane BNP Paribas also downgraded Renault to “neutral” from “outperform”.

Le Maire said he had asked French tax authorities to look into Ghosn’s affairs and that they had found nothing of particular note.

Reporting by Sudip Kar-Gupta and Leigh Thomas; Additional reporting by Helen Reid and Thyagaraju Adinarayan; Editing by Richard Lough and Keith Weir

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