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article imageGhosn arrest shakes fractious Franco-Japanese alliance

By Anne BEADE (AFP)     Nov 20, 2018 in Business

Carlos Ghosn's spectacular fall from grace is seen by some as a stunning corporate "coup d'etat" stoked by resentment at Japan's Nissan over a lopsided alliance with French carmaker Renault.

The chairman's shock arrest over alleged financial misconduct on Monday has shaken the complex Franco-Japanese coalition between Renault, Nissan and Mitsubishi and could be taken as an opportunity for the Japanese to rework it, commentators say.

Resentment in the Tokyo press had already been brewing over the structure of the alliance, which they say gives French carmaker Renault an undue share of the Japanese company's profits.

And Nissan CEO Hiroto Saikawa unleashed a surprising broadside against Ghosn and his legacy as he announced the firm has been investigating the chairman's misconduct.

"The tensions bubbling under the surface of the Renault-Nissan-Mitsubishi alliance in recent years have finally burst open in brutal fashion," David Fickling, a columnist at Bloomberg News, told AFP.

"From the perspective of Japan, the French company could resemble a parasite attempting to control its intrinsically stronger host.

Resentment had already been brewing over the structure of the automaker alliance before the coalitio...
Resentment had already been brewing over the structure of the automaker alliance before the coalition was shaken by Ghosn's arrest
LOIC VENANCE, AFP/File

"The question is whether this bloodshed will be enough to tame the intra-group tensions."

Japanese prosecutors have said Ghosn is being held on suspicion of under-reporting his income by around five billion yen ($44.5 million) over five years.

Corporate scandals are nothing new in Japan, but rarely are disgraced executives accused of personal enrichment.

Hans Greimel, the Asia editor of Automotive News said Saikawa was "leveraging this malfeasance as an opportunity to take stronger oversight over Nissan".

"This clears the way for Saikawa to put his own stamp on the company and blaze a new direction," he added.

- 'Nissan wants to be independent' -

Ghosn has long been a major player in the car industry and is credited with resurrecting the once-troubled Nissan, which he allied with Mitsubishi and Renault.

In the beginning, debt-laden Nissan was the weak link but the manufacturer was reborn at the cost of severe restructuring under the auspices of guru Ghosn.

Now its solid financial results are to thank for significant contributions to its French counterpart, which has reportedly caused Japanese employees to fume.

Renault currently owns 43 percent of Nissan, while Nissan only owns 15 percent of Renault.

The divisions were accentuated in 2015, after the French state temporarily raised its stake in Renault -- a move that had revived concern within Nissan.

"This could be a coup d'etat that had been planned in a bid to reject a Renault-initiated business integration with Nissan," said Nobutaka Kazama, an expert on corporate governance at Meiji University in Tokyo.

"I think the intention to remove Ghosn and revise the alliance to one led by Nissan is clearly in the works."

Nissan's Saikawa said the allegations against Ghosn were uncovered following a months-long investigation sparked by a whistleblower and accused the titan of accruing too much power.

Although he insisted the partnership among the three manufacturers "will not be affected by this event," analysts predict he may take the chance to loosen Nissan's involvement in the alliance.

"It does seem on the outside that there is a kind of frustration and concern. Nissan wants to be independent," Christopher Richer, CLSA automotive analyst, said of Saikawa's comments.

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