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Diplomatic Feud Brews Between Japan, France Over Ghosn

The arrest of Nissan’s ex-chairman Carlos Ghosn that has been extended for another 10 days by court authorities of Tokyo on charges of financial misappropriations and misuse of company assets, is likely to start a diplomatic standoff. The 19 year old Renault-Nissan business alliance is facing its toughest period due to arrest of Ghosn and leaders of both France and Japan are scheduled to meet on the sidelines of G-20 summit at Buenos Aires. It is not confirmed if both President Macron and Prime Minister Shinzo Abe will talk about the auto-alliance or Ghosn. Investigation authorities have to file charges against him by Dec 10th or arrest him on fresh charges to keep him in custody.

Diplomatic Feud Brews Between Japan, France Over Ghosn

Ghosn has been detained in Tokyo since 19th November and the arrest has left the French-Japanese firm without a leader as French government wants to retain the current capital structure between Renault and Nissan partnership. Currently Renault has a 43 percent controlling stake in Nissan while the latter has a non-voting stake of 15 percent in its French partner. After meeting of Japanese industry ministers Horoshige Seko and French Finance minister Le Maire in Paris last week they reaffirmed their support for the alliance.

But when Le Maire told on national television that both had agreed to retain the current capital structure, Japanese minister Seko denied making such a comment and sent a letter of protest for the remark. The current stalemate situation is likely due to increase of Renault’s stake in Nissan during 2015 that made the latter wary as it considered the step as a means of wielding greater control. Some sources stated that Ghosn’s charges are not very severe and the arrest is a means of removing him as his actions were leading to disturbance in balance of power within the alliance and Nissan CEO Hiroto Saikawa is trying to reduce Renault grip on the alliance due to its 43.4 ownership power.

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