MMTOY Mitsubishi Motors Corp (PK)

Auto maker's board prepares to name successor to longtime head, now in Tokyo jail

By Nick Kostov 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 23, 2019).

PARIS -- Renault SA plans to name a successor to jailed Chairman and Chief Executive Carlos Ghosn at a board meeting Thursday, according to people familiar with the matter, a move that would end the reign of an executive whose more-than-two-decade stint at the French car maker made him an auto-industry star.

The board's nomination committee is set to recommend that Thierry Bolloré, Renault's deputy CEO, succeed Mr. Ghosn as chief executive and that Michelin chief Jean-Dominique Senard take over the chairmanship of the auto maker, the people said, cautioning that a last-minute change is possible.

For Renault, Mr. Ghosn's departure would remove an impediment to a sustainable relationship with Nissan Motor Co., with which it has a two-decade-old alliance. The 64-year-old Mr. Ghosn was chairman of Nissan until he was stripped of that post after his arrest in Tokyo in November in connection with his tenure at the Japanese car maker,

With its chairman and CEO in jail, Renault in late November appointed Mr. Bolloré to run the company on a temporary basis.

The car maker had said it might appoint a permanent replacement for Mr. Ghosn once it became clear that the executive would be indisposed for the long term. Mr. Ghosn is likely to remain in jail until at least March after the Tokyo District Court on Tuesday rejected his latest request to be released on bail, despite his pledge to abide by strict bail terms, including wearing a monitoring device.

Mr. Ghosn has been charged with understating his compensation on eight years of Nissan financial reports and causing Nissan to pay the company of a Saudi friend who helped him with a personal financial problem.

He denies wrongdoing. Mr. Ghosn says he kept a record at Nissan of how much he thought he was worth but describes it as a hypothetical calculation that didn't bind Nissan to pay him anything beyond his publicly reported compensation. He says Nissan received valuable services from the Saudi company and paid it appropriately.

A separate and continuing probe into Mr. Ghosn's remuneration and expenses at Renault has found no evidence of wrongdoing.

The Tokyo court that rejected Mr. Ghosn's bail request on Tuesday didn't give a reason for its decision. A judge at a hearing on Jan. 8 said Mr. Ghosn was being held because of the danger he might flee or destroy evidence.

In an attempt to address those concerns, Mr. Ghosn's lead lawyer, Motonari Otsuru, said he filed a revised bail request Friday following the rejection of an earlier request. In it, Mr. Ghosn said he was prepared to be confined to an apartment in Tokyo and would wear an ankle-bracelet monitoring device as well as hire private-security guards approved by Japanese prosecutors. He said he would pay for those measures.

Mr. Ghosn also said that if released on bail, he would refrain from interacting with any potential witnesses against him in the case.

Renault would prefer that Mr. Ghosn step down before having to replace him, according to one of the people familiar with the matter. The French car maker has informed the executive's lawyer of its succession plans and the sides are working out how much pension and deferred compensation Mr. Ghosn is owed, the person said.

"It's in the interest of Renault that he steps down," the person said. "This would be coherent with the position that the company has taken and the board has taken from the very beginning."

Mr. Bolloré, 55, joined Renault in 2012, taking over as chief competitive officer the following year when the company's No. 2 executive, Carlos Tavares, left, eventually joining Peugeot. Mr. Bolloré's promotion to chief operating officer in early 2018 gave him more of a public profile and allowed Mr. Ghosn to focus on strategic issues, such as shoring up the three-way alliance with Nissan and Mitsubishi Motors Corp.

Like Mr. Ghosn, Mr. Bolloré started his career with Michelin, spending time in Japan and Thailand after joining the French tire maker in 1990. He left in 2005 to take up a post in China at car-parts maker Faurecia SA, staying on at the company until his move to Renault.

A keen sailor from the northwestern French region of Brittany, Mr. Bolloré is a distant cousin of Vincent Bolloré, a well-known executive in France whose family business runs rail and port concessions in Africa and has a controlling stake in the media conglomerate Vivendi SA, which owns Universal Music Group.

"He's a sharp leader," said a person who has worked with Mr. Bolloré since he joined Renault in 2012. "He asks for things very nicely, kindly, respectfully, but you have to understand very quickly that it has to be done."

--Peter Landers in Tokyo contributed to this article.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

January 23, 2019 01:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.