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Report: Ghosn tried to set up foundation to seize control on 3-way alliance

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Report: Ghosn tried to set up foundation to seize control on 3-way alliance

Executives acting for beleaguered Carlos Ghosn tried to set up a foundation to consolidate his control on the Renault SA, Nissan Motor Co. Ltd., Mitsubishi Motors Corp. alliance and to have a free hand in determining his compensation, Financial Times reported May 24, citing people with knowledge of the talks.

The plan involved setting up the foundation in the Netherlands and was crafted months before his arrest. One version of it involves granting the foundation ownership on all of Ghosn's holdings in the three companies, thus allowing him to set his compensation without the need to publicly disclose it, according to the Financial Times. However, the alliance and the French government rejected the proposal on fears there will be no scrutiny on Ghosn's control, the sources said.

A similar scheme was proposed in 2017, which would allow Ghosn and executives of the three companies to receive undisclosed bonuses. The French government also rejected the proposal, according to the report.

Despite its rejection, this separate plan was revived at a time Ghosn was mulling on merging Renault and Nissan. However, this was killed off in an April 2018 meeting between Mouna Sepheri, Ghosn's special adviser at Renault, Hari Nada, head of the office of Nissan's CEO and a French government representative. French government officials immediately rejected the plans over concerns that the ultimate goal was for Ghosn to seize control on the three companies' alliance, according to Financial Times.

People who were familiar with Ghosn's thinking said that a Dutch-based foundation was discussed in 2017 but he rejected it since it was better to just create a holding company structure. They also said he was not familiar with any updates on this matter as the idea of setting up the foundation was already rejected at that time, according to the report.

Nissan and Renault declined to comment, while the newspaper was not able to reach Sepheri and Nada for comment.

Ghosn was arrested Nov. 19, 2018, on allegations he under-reported his compensation and used Nissan's assets for his personal benefit. He was allowed to post bail in March but was re-arrested again on April 4 over new allegations of misappropriating Nissan funds. He was allowed to post bail on April 25, with the decision coming after days Nissan filed charges alleging a shell company controlled by Ghosn received $5 million of the $10 million the company sent to an overseas distributor in Oman between 2017 and 2018.

Ghosn denied these charges, accusing the Japanese automaker of playing "a really dirty game" to get him arrested in order to stop a merger involving Nissan.