Carlos Ghosn ttends a joint news conference with Mitsubishi Motors Corp's chairman and CEO Osamu Masuko in Tokyo, Japan, in this file photo. Picture: REUTERS
Carlos Ghosn ttends a joint news conference with Mitsubishi Motors Corp's chairman and CEO Osamu Masuko in Tokyo, Japan, in this file photo. Picture: REUTERS

A senior executive at Mitsubishi says the company’s alliance with Nissan and Renault can survive management upheaval, a day after it fired Carlos Ghosn as chair over financial misconduct allegations.

The future of the 19-year alliance, one of the biggest automotive groups in the world, has been thrown into doubt after the November 19 arrest and subsequent ousting of Ghosn as chair of both Nissan and Mitsubishi.

Ghosn, 64, is the architect of the alliance and its chair. He also remains CEO and chair of Renault.

Senior executives of the alliance are due to meet for their regularly scheduled gathering later this week in Amsterdam that sources said would start on Wednesday.

Executives are also expected to discuss Ghosn’s chairmanship of the alliance, one source at Nissan said, seeking anonymity because the contents of the meeting are not public.

Mitsubishi CEO Osamu Masuko said on Monday he would join the meeting via video link, while Nissan CEO Hiroto Saikawa, who remains in Japan, has not decided whether he will travel for the meeting, two company sources said. Nissan declined to comment.

A major longer-term focus is whether and how the ownership structure of the alliance might evolve, as Ghosn, under pressure from the French government, had pushed for a deeper tie-up, including potentially a full merger between Renault and Nissan, despite strong reservations at Nissan.

Renault holds about 43%  of Nissan, which in turn owns a controlling 34% stake in Mitsubishi. Nissan, the biggest partner in the alliance by sales, has a non-voting 15% stake in the French partner.

Speaking to reporters at a research and development centre in Okazaki, central Japan, Mitsubishi executive vice-president Mitsuhiko Yamashita said regardless of the shape the alliance takes, the three companies would continue to source more parts together and leverage their ties to develop new technologies.

“I can’t say how the three-way partnership might evolve, but as car-making requires more and more new technologies, the days when a single carmaker can handle everything on its own are going to disappear,” Yamashita, who once served as Nissan’s top engineer, said.

Renault audit

Renault will appoint a new chief compliance officer to head the carmaker’s own independent audit triggered by Nissan’s allegations against Ghosn, three sources said on Tuesday, two days after finance minister Bruno Le Maire announced the probe.

The investigation will conduct checks on Ghosn’s pay and benefits as well as those of his immediate staff and executives, they said. The promotion of security chief Eric Le Grand to the new compliance role was first reported by Les Echos.

Ghosn is in detention in Tokyo over suspicion of financial misconduct, including alleged understating of his income and personal use of corporate money. He has denied those allegations, public broadcaster NHK has reported.

He has not made public comments on the allegations and Reuters could not contact him or his lawyers for comment.

Yamashita said the alliance would need to work out who would make decisions, and how, without the binding figure of Ghosn, but was confident the partnership was strong enough to withstand the challenge.

“Renault and Nissan have a history of nearly 20 years, and we’re coming up on two years since Mitsubishi Motors joined,” he said.

“The foundation on which the co-operation has been built is becoming strong, so I have faith that we can work with that.”

Sealed in 1999 when Nissan was rescued from near-bankruptcy, the Franco-Japanese alliance was enlarged in 2016 to include Mitsubishi and enabled the members to jointly develop products and control costs.

Yamashita’s remark echoes comments by Saikawa, who told staff in a town-hall meeting on Monday that the alliance remained important to generate synergies.

Saikawa also said there was an “excessive concentration of power” on Ghosn, and that in future alliance members should communicate better to help preserve their independence.

Fresh allegations

In fresh allegations on Tuesday, Japanese media reported that Ghosn had shifted personal investment losses incurred during the 2008 financial crisis to Nissan to avoid millions of dollars in losses for himself.

Citing several unidentified sources, the Asahi Shimbun newspaper said when Ghosn’s bank had called for more collateral from the executive, he instead handed the rights over the derivatives trade to Nissan, which effectively shouldered ¥1.7bn ($15m) in losses.

Japan’s Securities and Exchange Surveillance Commission (SESC) discovered this incident during that year’s routine inspection, the newspaper said.

Nissan said it could not comment on the report. An SESC spokesperson said the watchdog could not comment on individual cases. — Reuters