Showdown at Renault: France wants Carlos Ghosn out

The French government is moving to install an interim leader at Renault following the arrest of CEO and Chairman Carlos Ghosn in Japan on Monday.

Finance Minister Bruno Le Maire said that he would meet with representatives from Renault on Tuesday to discuss appointing interim management because Ghosn is “no longer capable of leading the group.”

Ghosn, an auto industry legend who is also chairman of Nissan (NSANY) and Mitsubishi Motors (MMTOF), was detained by Japanese authorities after an internal investigation at Nissan revealed “significant acts of misconduct” over many years.

A Renault (RNSDF) spokeswoman said the company’s board would meet Tuesday evening. The French government owns 15% of Renault. Nissan is the other major shareholder with 15%.

Nissan has accused Ghosn of significantly under-reporting his compensation and misusing company assets.

More allegations emerged Tuesday in Japanese media. Public broadcaster NHK reported that Nissan provided Ghosn with homes in four countries, but he did not declare the benefit.

NHK also reported that prosecutors suspect Ghosn may have pocketed money that was meant for other executives at Nissan.

Ghosn is yet to respond to the allegations.

Le Maire said in a television interview he would not request that Ghosn be removed from the company’s board “because we have no proof.”

The French government official said his priority was securing the future of Renault.

“To all the workers of Renault: do not worry, we are dealing with the subject, we are demanding an interim governance and we are taking all necessary contacts to guarantee the continuity of the Renault-Nissan alliance,” he said on Twitter.

Hours before Le Maire called for a change in management, one senior executive at Renault said he supported Ghosn.

“On your behalf, we would like to state here our full support for our Chairman and CEO,” Renault COO Thierry Bollor√© wrote Monday in a memo to employees first reported by the Financial Times.

A spokesperson for Renault confirmed the authenticity of the memo.

Nissan’s board will meet Thursday to remove Ghosn from his position as chairman. Mitsubishi has also asked its board of directors to “promptly remove” Ghosn from his position.