Renault says widening probe examined pay to Ghosn aide Sepehri

As Carlos Ghosn gets pulled deeper into Japan’s legal system, the spotlight has once again turned to Renault, where a widening probe into the pay of top executives is drawing attention to Mouna Sepehri, one of the chairman’s closest advisers.

Renault on Friday said its board examined the compensation of Sepehri, who is deputy head of Ghosn’s office at the French automaker. It also acknowledged expanding the pay inquiry to include RNBV, a Dutch company that forms its alliance with Japanese partners Nissan Motor Co. and Mitsubishi Motors.

While no fraud has been uncovered for 2017 and 2018, the pay received by top executives over previous years will also be examined, Renault said. The inquiry began after Ghosn was arrested Nov. 19 in Japan for alleged financial crimes, and pressure to delve into RNBV’s finances has come from the French government, Renault’s most powerful shareholder, and unions.

Ghosn’s fate at the helm of Renault is looking increasingly shaky. The automaker and the French government have cited the presumption of innocence for a decision to keep him on as CEO and chairman, while naming interim replacements. Nissan, whose investigation contributed to Ghosn’s arrest, and Mitsubishi have ousted him.

Legal affairs

Renault’s board met Thursday and made no decision on Ghosn’s role at the automaker. Any ruling is unlikely before Tuesday, when the executive’s request for bail will be decided in Tokyo, according to people familiar with the matter.

Renault specifically cited the probe into Sepehri’s pay following a report by Reuters that she received 500,000 euros ($573,950) as a board member at RNBV without the knowledge of Renault’s board. Sepehri oversees communication as well as legal and public affairs at Renault, with an official title of executive vice-president, office of the CEO.

Ghosn and Greg Kelly, a Nissan board member who was arrested at the same time as Ghosn in Japan, agreed in 2013 to pay her an up-front sum of 125,000 euros along with a monthly fee of 8,333 euros for her role as a management board member, according to minutes seen by Bloomberg of a meeting of the RNBV governance, appointments and remuneration committee. Panel members were Ghosn, Kelly and Sepehri, who recused herself from the deliberation.

Delicate negotiations

Separate documents addressed to Sepehri show that the gross amount of director fees she was paid by RNBV reached about 500,000 euros over five years.

Sepehri, an Iran-born lawyer who moved to France with her parents at the age of 12, said in a 2016 interview that her dual-cultural upbringing helped her during delicate negotiations, especially with the Japanese on relations between Renault and Nissan.

Sepehri couldn’t be reached for comment and her office referred questions about her compensation at RNBV to Renault. A Renault spokesman referred to the company’s statement that “remunerations are compliant and exempt from any fraud” for the past two years.

Bail application
Ghosn was indicted Friday for a second time by Japanese prosecutors for acts including temporarily transferring personal trading losses to Nissan in 2008, as well as for understating his compensation for three years through March 2018. Last month, he was indicted for under-reporting his income for an earlier period. His lawyers applied for bail, while acknowledging the slim chance of success. Ghosn has denied wrongdoing.

Japanese newspaper Asahi reported that the executive was also paid additional compensation of around 7 million euros through another subsidiary of the car-making partnership. Nissan’s probe uncovered the payment from Nissan-Mitsubishi BV, a joint venture between the two Japanese manufacturers that was incorporated in Amsterdam in June 2017.

The arrest of the high-flying executive at Tokyo’s Haneda airport has jolted the world’s biggest auto alliance, raising questions over whether the two-decade partnership will survive his downfall.

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