Carlos Ghosn row erupts as Renault backs sacked Nissan chieftain

Open warfare broke out in the world’s biggest car-making alliance on Tuesday over the downfall of titan Carlos Ghosn as France’s Renault offered its “full support” while Nissan prepared to sack him.

Ghosn, 64, leads the three-way tie-up between Renault and Japanese manufacturers Nissan and Mitsubishi Motors, which makes one in nine of the world’s cars. He faces prosecution for under-reporting pay and misusing company funds. Ghosn chairs all three firms and is chief executive of Renault.

France’s finance minister Bruno Le Maire today urged Renault to replace the former superstar, saying he was “not in a position” to lead the firm. But Renault chief operating officer Thierry Bolloré resisted, despite the French state’s 15% stake in the business. He said Ghosn had Renault’s “full support” ahead of a board meeting today.

Ghosn, who signed a contract this year lasting until 2022, is currently in custody in Tokyo. Nissan’s board will meet later this week to confirm his dismissal, while prosecutors have 48 hours to decide whether to press charges.

His stunning fall from grace reverberated though stock markets as new details emerged of the “serious misconduct” claims that engulfed him.

Fears over the unravelling of the alliance caused shares in Nissan to plunge more than 5% in Tokyo overnight, wiping £1.5 billion off the company’s value, while Mitsubishi plunged 7%.

In Paris, Renault’s shares slid 4% on top of an 8% fall in the previous session. Commerzbank’s Demian Flowers said Ghosn was the “cement that binds” the trio of partners together, and CLSA’s Christopher Richter said the scandal could be “the beginning of the end of Nissan as an independent company”.

Japan broadcaster NHK said investigators suspect Ghosn, in charge of allocating pay for Nissan’s 13 top executives, siphoned off part of the funds.

He is also suspected of misusing Nissan’s funds on company-issued housing for personal use in Lebanon, Paris, Amsterdam and Rio de Janeiro’s Copacabana beach. Reports allege he was suspected of not paying his full share of the rent. Ghosn is also accused of under-reporting his salary by some 5 billion yen (£34.6 million).

He began his career at Michelin before reviving Renault, a trick he repeated at Nissan. Under a partnership originally forged in 1999, Renault owns 43% of Nissan, which owns 15% of Renault and 34% of Mitsubishi.