As if the European auto sector didn’t have enough problems, the surprise arrest of Renault (PA:RENA) CEO and Nissan Chairman Carlos Ghosn has rattled shares in the French auto giant sending them to their lowest levels since 2014.
It beggars belief that someone as high profile as Carlos Ghosn should disappear from the scene of the global auto scene as a result of accusations of financial impropriety, in terms of misreporting compensation to the Japanese securities regulator.
What is more concerning is not so much about how these accusations could have any basis in truth, but what they say about the corporate governance of a company that is 15% owned by the French government.
Coming as it does on the back of a shift in consumer car buying habits as well as the prospect of significant changes in the regulatory framework the last thing one of the world’s biggest automakers needs is the disruption caused by an investigation into the behaviour of a man who has towered over the global auto sector.
According to Nissan an investigation has been underway for several months, with another director Greg Kelly also reported to be under investigation as well.
With the investigation still ongoing there is speculation that the tie-up between Nissan and Renault might undergo a significant re-evaluation in light of these allegations, given that Carlos Ghosn was and has been instrumental in looking to deepen the integration of the different brands, with the possibility of a full merger later on down the line.
Today’s events throw any prospect of that up in the air as the Nissan board meets later this week to remove both men from the board.
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