Carlos Ghosn Sues Renault For Pension, Share Issuance

Carlos Ghosn, the former automaker executive who miraculously escaped Japan where he faces prosecution, has initiated a legal battle with French carmaker Renault demanding he receive an annual pension of about $887,000 as well as shares valued at about $17.25 million.

Ghosn, now living under armed guard in Beirut, Lebanon, is challenging Renault after it said last year that Ghosn lost the right to receive his pension since he resigned as its CEO while imprisoned in Japan.

Renault’s board of directors further determined that Ghosn lost rights to shares allocated to him between 2015 and 2018 since he was no longer with the company. As a result, Ghosn lost 380,000 shares.

But Ghosn countered that he is entitled to all compensation because his resignation from his post was forced upon him by Japanese authorities.

"I have rights vis-à-vis Nissan, vis-à-vis Renault, which have not been respected, and I intend to claim them in court," he said last Wednesday at a press conference in Beirut.

Ghosn also told French television: "I didn't resign at all, I withdrew from my job to allow Renault to function, it was in January, I was in prison. I couldn't leave Renault paralyzed by a situation like that. From there to saying that I resigned, frankly that's an interpretation that's specific to those who are saying that."

A hearing on the matter is scheduled for "the end of February.” Ghosn, who is also under a travel ban in Lebanon, is not required to attend the hearing.

Union officials in France, a nation wracked by protests over proposed changes to its pension system, have condemned Ghosn.

"At a time when the [French] government insists on wanting to cut employee pensions, former CEO Carlos Ghosn remains unscrupulous. He is demanding the payment of an additional annual pension [that is] about 637 times the minimum wage," the Confédération Générale du Travail, or CGT, union at Renault said.

Meanwhile, the partnership that Ghosn once engineered between Renault and Nissan may be crumbling. The Financial Times reported that senior Nissan executives are preparing contingency plans for an eventual separation from Renault.

“We firmly believe the relationship between Renault-Nissan and hence the alliance is broken and likely beyond the point of repair,” Arndt Ellinghorst, lead auto analyst at Evercore ISI wrote on Monday.

However, Bloomberg reported that Nissan is not considering a breakup with Renault.

“The alliance [with Renault] is the source of Nissan’s competitiveness,” Nissan said in a statement Tuesday. “Through the alliance, to achieve sustainable and profitable growth, Nissan will look to continue delivering win-win results for all member companies.”

The alliance, which also includes Mitsubishi Motors of Japan, is "solid, robust, everything but dead," the chairman of Renault, Jean-Philippe Senard, told the Belgian newspaper L'Echo.

French Finance Minister Bruno Le Maire said reports of breakup the alliance were "malicious."

In his news conference in Beirut last week, Ghosn – who has served as CEO of both Nissan and Renault -- mocked the recent performance of the two carmakers. Ghosn also threatened to reveal the carmarkers’ dirty laundry in the near future.

A separation between Renault and Nissan would be complex and costly. Renault currently holds 43% of Nissan’s shares as its biggest stockholder while Nissan owns 15% of Renault.

Nissan said on Tuesday that the board governing the alliance agreed in November to work to “significantly enhance and accelerate the operational efficiency of the alliance for the benefit of the member companies, including action plans to maximize the contribution of the alliance to each company’s strategic plans and operating profit.”