Ghosn Rebuked by France in Spy Case as He Prepares Nissan Quake Recovery
CEO of Nissan Motor Co. Carlos Ghosn
Tomohiro Ohsumi/Bloomberg
Carlos Ghosn, chief executive officer of Nissan Motor Co. and Renault SA.
Carlos Ghosn, chief executive officer of Nissan Motor Co. and Renault SA. Photographer: Tomohiro Ohsumi/Bloomberg
March 15 (Bloomberg) -- Renault SA Chief Executive Officer Carlos Ghosn gave up his bonus and turned down second-in-command Patrick Pelata’s resignation after wrongfully accusing senior managers of spying in a case that has become a personal embarrassment for the top two executives. Bloomberg's Erik Schatzker reports in today's Movers & Shakers. (Source: Bloomberg)
Renault SA (RNO) Chief Executive Officer Carlos Ghosn, forced to apologize publicly to three managers he wrongly accused of spying, faces “consequences” from the French government for the automaker’s bungled espionage probe.
“There will have to be consequences for the incredible amateurism and lack of dignity in the accusations made against these men,” Budget Minister Francois Baroin said yesterday. The government, Renault’s biggest shareholder, “cannot just let this pass,” he said.
Ghosn, who also heads alliance partner Nissan Motor Co., is contending with dual crises after the espionage case he personally oversaw unraveled and Japan was devastated by last week’s earthquake, halting production at six Nissan plants.
The CEO plans to travel to Japan tomorrow to oversee Nissan’s recovery operations, a person familiar with his schedule said, declining to be identified because the plans are private. Renault on Monday offered to reinstate and compensate three executives after police discredited the carmaker’s claims that they received payments from Chinese companies through overseas bank accounts.
Renault was trading down 51 cents, or 1.4 percent, at 37.04 euros as of 4 p.m. in Paris. The shares have dropped 15 percent this year, compared with a 9.2 percent decline in the 14-member Stoxx 600 Automobile & Parts Index.
As the espionage case began to disintegrate earlier this month, pressure mounted on Ghosn, who defended the spying claims by saying in a January TF1 interview he had “multiple” findings to support them. Ghosn on Monday retracted the allegations and pledged to forego his 1.6 million-euro ($2.23 million) bonus and stock options.
Case Crumbles
Ghosn’s “resignation isn’t a subject of discussion at this stage,” Baroin, who is also the government’s official spokesman, said on LCI television.
The case against the three fired executives was based on verbal information obtained by security manager Dominique Gevrey from an undisclosed source, for which Renault had paid more than 300,000 euros, Paris Chief Prosecutor Jean-Claude Marin said Monday. Gevrey has been jailed to face charges of “organized fraud.” His attorney Jean-Paul Baduel did not return calls and messages seeking comment.
Chief Operating Officer Patrick Pelata and other executives involved in the mishandled internal probe will also hand back their 2010 bonuses and receive no stock options this year, the company said.
Not The End
The government, which owns a 15 percent stake in Renault, still expects an independent inquiry promised by the automaker to “get to the bottom of who was responsible” Industry Minister Eric Besson said today. It’s “not illegitimate” to consider Ghosn and Pelata’s jobs as being in the balance, he added.
Carlos Ghosn bears some of the responsibility, since he was the one who went on TF1 to say he had ‘certainties’ about the case,” Besson said on RMC radio.
Renault fired upstream development chief Michel Balthazard, his subordinate Bertrand Rochette and deputy electric-car program chief Matthieu Tenenbaum in January after accusing them of espionage.
A meeting planned between Ghosn and Pelata and Balthazard -- a former management committee member who has ruled out a return to work -- has yet to be organized, his lawyer Xavier Thouvenin said today. Renault spokeswoman Caroline De Gezelle did not immediately return calls seeking comment.
Ghosn will head to Japan to oversee Nissan’s recovery from the earthquake that has halted factories and threatened supply lines. Nissan, Japan’s second-largest carmaker, suspended operations at four plants until today and at two other plants until March 18, the Yokohama-based company said on Monday.
Nissan may lose 2 billion yen ($25 million) for each day of lost operations in Japan, Goldman Sachs Group Inc. estimated.
To contact the reporter on this story: Laurence Frost in Paris at lfrost4@bloomberg.net
To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net
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