Friday, January 11, 2019

a loyal Ghosn would have received 500,000 euros without the knowledge of the Renault Board of Directors


A faithful of Carlos Ghosn Renault has been paid an additional six-figure salary by the holding company overseeing the alliance with Nissan, without the knowledge of the board of the French automaker, according to sources and documents that Reuters was able to consult.

Carlos Ghosn, still CEO of the diamond group, and the administrator of Nissan Greg Kelly, both at the heart of the Japanese investigation of financial malpractice that shook the Renault-Nissan alliance, approved a payment for a total of 500,000 euros to Mouna Sepehri, Deputy Chairman of Renault and in charge of governance as secretary of the Board of Directors.

Governance problem and potential conflicts of interest

There is no reason to suggest that these payments made by Renault-Nissan BV (RNBV) were illegal or that they breached Renault-Nissan's governance rules, but they highlight governance problems and conflicts of interest. potential.

Renault refused to comment directly on the remuneration paid by RNBV to Mouna Sepehri as a member of the board of directors of the Dutch holding, which had never been made public. Mouna Sepehri did not respond to Reuters requests for comment.

"Individual compensation, although justified, is not published, according to law," said a spokesman for the French automaker in a statement by email. "Renault is indignant that the remuneration of one of its senior executives is the subject of a nominative publication and recalls that it constitutes personal information."

Mouna Sepehri, only of the board of RNVB to have received a direct salary

A lawyer by training, Mouna Sepehri was at the heart of negotiations for the creation of the alliance with Nissan, the acquisition of Dacia and the expansion of the alliance to Daimler.

She currently sits on the board of RNBV along with nine other Renault and Nissan executives. He is the only board member who has directly received a salary from the subsidiary.

She received 200,000 euros in 2013, and 100,000 euros each year between 2014 and 2016 in addition to her remuneration at Renault, according to statements that were sent to her and the minutes of a meeting at which Carlos Ghosn and Greg Kelly ordered the payments "for the performance of his work as a member of the board".

"It's important that, as a rule, board secretaries do not get influenced by a manager who could promise them compensation at the level of a subsidiary," commented Loïc Dessaint, chief executive of the consulting company. to Proxinvest shareholders.

He adds :

"If Mrs Sepehri was paid by RNBV, it is indeed a situation of conflict of interest, and at least it would have been essential for the directors of Renault to know it."

How to legally pay income without public communication

Carlos Ghosn and Greg Kelly are being sued in Japan for failing to report $ 43 million in additional compensation for the 2010-2015 period. The former president of Nissan, who has been incarcerated since November, and Greg Kelly, deny that these deferred salaries have broken the law, and respond that it was not legally required to make them public.

The Japanese investigation, which led to the arrest of Carlos Ghosn in November and his ouster from the Nissan presidency, is now interested in the finances of RNBV and other entities of the Renault-Nissan alliance.

Reuters reported on December 19 that Mouna Sepehri was among the few leaders of the alliance who tried in the past to find legal ways to pay Carlos Ghosn an income, without public communication, via RNBV or other shared financial entities.

In 2010, this faithful of Carlos Ghosn, and Greg Kelly worked on a proposal to create an additional source of income for the strong man of the alliance via RNBV, before abandoning the project by concluding that he could escape the obligation in France to make the elements of remuneration public.

Reuters defeats non-public bonus plan

In 2017, Mouna Sepehri and other executives also participated in a project to pay several million euros in undeclared bonuses via a Dutch service company. The plan, which was mainly to benefit Carlos Ghosn, was abandoned after Reuters revealed it in June of the same year.

These two attempts, confirmed by Renault, would have resulted in significant amounts paid to the CEO of the alliance, without the knowledge of the Board of Directors and shareholders, while complying with the legal framework and rules of Renault-Nissan.

French government puts pressure on transparency

Last week, the French government asked Renault's management to explain compensation that would have been paid to senior executives of the company through the Dutch holding company RNBV.

Economy Minister Bruno Le Maire said Sunday that the French state, the main shareholder of the manufacturer, had asked for information and transparency on the remuneration paid by the holding company.

"I want to know to whom these remunerations have been paid, if they have been declared, if they correspond to a service rendered, and therefore if (...) Renault's board of directors and Renault's shareholders have been informed of this remuneration, "he said.

He continued:

"You see that we follow this subject day by day, with one main concern: the durability of the alliance and the solidity of Renault."

The scandal that splashes Carlos Ghosn and Greg Kelly has shaken the Renault-Nissan alliance, already fragile because of a structural imbalance badly lived in Japan - Renault holds 43.4% of Nissan, and Nissan only 15% of Renault, without voting rights.

And if Nissan and Mitsubishi have both dismissed Carlos Ghosn President, Renault has not followed suit for the time being. The French group opted for an interim management, the deputy general manager endorsing the general manager's suit, but while maintaining Carlos Ghosn in his duties as CEO.

Control of communication, legal and public affairs

Members of Renault's board of directors, where the French state has two representatives, say they expect to be given full access to the findings of the Nissan investigation, currently reserved for lawyers who depend on Mouna Sepehri.

Through her duties, she controls communication, legal and public affairs, as well as the flow of information to the board. Renault explains these access restrictions by a requirement of judicial confidentiality.

"Ms. Sepehri occupies a classic function of general secretariat," said the group, adding that he relies "on the opinion of his lawyers and his advice" in his way of apprehending what emanates from the investigation from Nissan.

The CGT denounces an operation "opaque"

Mouna Sepehri joined Renault in 1996 as Deputy Legal Director. Three years later, she took part in the negotiations with a Nissan then in near-bankruptcy, whose express rescue forged the legend of Carlos Ghosn. Three years later, in 2002, Renault-Nissan BV was founded as a co-financed management organization to support the deepening of the Franco-Japanese alliance.

The CGT, represented on the board of directors of Renault, said recently to have contacted Bercy to denounce a functioning "opaque (which) feeds day after day a lot of questions." The union was citing payments to an officer, without specifying his name.

In response, the government sent a letter to Renault on 4 January asking for details of any payments to managers via the Dutch holding company that would not have been made public.

Carlos Ghosn and Greg Kelly agreed on March 26, 2013 that RNBV would pay 125,000 euros immediately to Mouna Sepehri, then monthly payments totaling one year 100,000 euros, according to the report accompanying their decision.

The two men met that day on the Governance, Nominations and Compensation Committee of the RNBV Board. Under the operating rules, Mouna Sepehri, third member of the committee, could not be present.

Four annual statements issued by RNBV confirm the payments that followed, minus a Dutch withholding tax. All RNBV directors are salaried managers of Renault or Nissan, but Mouna Sepehri is the only one to have received additional remuneration for his role on the board of the holding company.

Renault involves Hiroto Saikawa, the scorer of Renault CEO

In its response to Reuters, Renault said the board of directors of RNBV (where also sit Carlos Ghosn, Thierry Bolloré and Nissan CEO Hiroto Saikawa) was informed of the remuneration of its members.

"The management report of RNBV, validated by its Executive Board and the Statutory Auditors, includes information on the compensation of its managers," said Renault.

According to a senior leader of the alliance who had access to the annual reports, the other directors of RNBV did not know, however, who received the 100,000 euros described only as remuneration to "members of the board".

"There has been no official decision of the Board of Directors on this remuneration", the source said on condition of anonymity. Other alliance leaders and administrators of RNBV refused to comment.

"In good governance, the committee's proposal must always be validated by the board of directors as a whole," said Loïc Dessaint of Proxinvest. "And the fact that there is only one of the directors who has a salary, that's very troubling."

(With Reuters)





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