INTERNATIONAL - Renault SA and partner Nissan Motor Co. have uncovered payments made under Carlos Ghosn that allegedly went toward corporate jets, a yacht and his son’s startup, leading the French carmaker to alert authorities about potential wrongdoing, according to people familiar with the matter.
The transactions at Renault, Nissan and their Amsterdam-based venture RNBV were revealed in probes and amounted to millions of euros to companies in Oman and Lebanon that may have then been used for the personal benefit of former head Ghosn and his family, said the people, who asked not be be named because the details aren’t public.
The flurry of allegations will be discussed by Renault’s board on Wednesday and stem from investigations started after Ghosn’s arrest in November in Tokyo. The 65-year-old former executive has denied the Japanese charges that he improperly used company funds and is awaiting trial. He resigned from his posts as Renault CEO and chairman in January, months after being ousted as chairman at both Nissan and Mitsubishi Motors Corp., the third partner in the carmakers’ global alliance.
This is the second time Renault has signaled possible wrongdoing by the fallen executive to authorities in France. In February, the company disclosed Ghosn may have improperly used a sponsorship deal to host his wedding party at the Palace of Versailles. He has offered to pay back 50,000 euros.
Asked about the latest allegations, a spokeswoman for the French prosecutor’s office said Renault on March 29 added many documents to the authority’s ongoing investigation, but she declined to provide details. Renault and Nissan declined to comment.
A Paris-based spokeswoman for the Ghosn family denied any wrongdoing by Ghosn and said reports on Oman payments, use of the airplanes and the startup are part of a smear campaign to make the former executive look greedy. She declined to comment further on what she called "rumors " that are not backed by facts or any pending legal procedure , adding that no Renault payment to the Oman distributor benefited Ghosn or his family.
The payments in Oman were to Suhail Bahwan Automobiles LLC, which is the carmakers’ exclusive distributor in the sultanate, according to the people. Renault has reported the transactions to the French prosecutor’s office on suspicion the money may have been used by Ghosn for personal reasons, they said.
Nissan first flagged the payments to Renault along with discounts on vehicles to Oman dealerships that the Japanese company suspected as being inflated, according to one of the people. Funds were then transferred to a Lebanese company named Good Faith Investment, which counted a Ghosn childhood friend as a shareholder, the person said, citing the Renault probe. The money may have served to pay for the family’s yacht and to fund the startup of his son Anthony, according to the probe.
A spokesman for the startup called Shogun denied the allegations. The San Francisco-based company has a platform for home improvement financing.
Japanese prosecutors have asked Renault for related financial documents, the person said.
French newspaper Le Figaro first reported that Renault paid the Oman-based distributor through a special cost center overseen by Ghosn rather than through marketing and sales divisions.
Ghosn’s Paris-based lawyer, Jean-Yves Le Borgne, said he wasn’t aware of Renault reporting any payments to the French prosecutor. An Oman-based Nissan supplier had received bonuses that were related to its performance, he said.
In January, Japanese newspaper Nikkei reported that Ghosn paid $32 million and $16 million to Nissan suppliers run by two acquaintances in Oman and Lebanon. The payments were made from the cash reserve at the center of breach of trust allegations against Ghosn, the newspaper said, adding that Tokyo prosecutors suspected Ghosn may have used Nissan’s "CEO reserve" fund for personal purposes.
French magazine L’Express has reported that Japanese prosecutors were investigating the possibility that Ghosn borrowed $30 million from billionaire Bahwan, based on a document that was found in Ghosn’s apartment in Japan. A Suhail Bahwan spokesperson couldn’t be reached for immediate comment.
A separate probe into RNBV found that Ghosn had the use of four jets operated by the alliance company, one of the people said, adding that this hasn’t been flagged to authorities. The aircrafts’ operating costs have raised suspicions among auditors, another person said. Ghosn was arrested in Japan after landing in Tokyo on one of the airplanes .
The Renault board is also expected to examine on Wednesday payments made by RNBV to Ghosn’s Lebanon-based lawyer, Carlos Abu Jaoude, one of the people said. Jaoude confirmed by phone that he worked for Ghosn personally as well as for RNBV . He declined to detail what projects he handled for the Alliance.