In an emergency meeting following the charges placed by Japanese authorities against Carlos Ghosn and his subordinate Greg Kelly on Monday for financial misconduct related to the reporting of salaries at Nissan, the board of directors at French automaker Renault have decided to retain Ghosn as chairman and CEO for the time being.
The preliminary conclusion of Renault’s board is that Ghosn’s salary, and the conditions under which the salary was approved, were in compliance with applicable law.
According to the charges, Ghosn and Kelly understated Ghosn’s earnings from 2011 to 2015 by half in Nissan’s securities filings: 4.99 billion yen ($ 44.3 million) compared with 9.86 billion yen ($ 88.4 million), including bonuses. It has also been alleged that Ghosn used company funds for personal real estate. Both men are currently in a prison in Tokyo.
Renault is part an alliance with Nissan and Mitsubishi that was headed by Ghosn. Nissan and Mitsubishi chose to fire him following his arrest on November 19 due to the alleged financial misconduct. Renault, however, announced an interim chairman and CEO to take over from Ghosn until a full investigation into his alleged misconduct could be completed.
Lawyers for Nissan have provided Renault’s legal team with a presentation concerning the investigation carried out at Nissan. The matter first came to light based on a whistle blower’s report at Nissan that was followed up by an internal investigation.
Renault’s board has requested that the automaker’s legal team continue its review and assessment of the information provided by Nissan, in liaison with Nissan’s lawyers. The board also noted at its meeting that it is awaiting information concerning Ghosn’s defense.
Ghosn and Kelly have not made any statement through their lawyers, but Japanese media has reported that they have denied the allegations. If they plead not guilty, the case is likely to go to trial, and Ghosn could face a fine of up to $ 6.2 million and 10 years in prison, Nikkei reported.