Following the Carlos Ghosn case let us dismiss also the auditors of Renault & Nissan.

Following the Carlos Ghosn case let us dismiss also the auditors of Renault & Nissan.

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Pierre-Henri LEROY a lancé cette pétition adressée à The French State, Direction générale du Trésor (Monsieur le Chef du bureau "Stabilité financière, comptabilité et gouvernance des entreprises") et à


The independent auditors are the pillars of the financial markets, for their job is to monitor the fairness and legality of the companies accounts and activities.

Financial concentration created powerful multinational firms but also sometimes allowed for self-dealings and misbehaviors at the top. Independent auditors, because they offer also many others services to management, sometimes ignored or even covered-up these failures which endanger the profitability or even the survival of these groups.

The Renault-Nissan self-dealing case, illustrated by the Versailles video, and confirmed by recent press updates, was an extreme and unexpected case : Nissan turned against its former chairman and CEO for potentially criminal acts which the company auditor, the Japanese branch of EY, had, according to the Japanese press,  known for long :

While these already settled with the SEC for about 140 M$ mis-reporting, it appears appropriate to restore the accountability of auditors, as these audit firms are the only protection of the shareholders, employees and directors, but also consumers.This petition therefore calls for their eviction and the putting into play of their responsibility.

As stakeholders of Renault SA we hereby request the French State, the AMF, the Board of directors and the workers Council of Renault SA to consider the legal dismissal of the two acting auditing firms of Renault SA and Nissan Motors, EY and KPMG before the next general meeting of the Renault shareholders to be held on June 12  2019 in Paris.



“For the protection of the Renault employees, clients, shareholders and Directors, and in line with articles  L823-6  and  L823-7 of the Code de commerce, we shareholder(s) of Renault SA, the owner of 43% of Nissan, h's employees, clients and shareholders we hereby request the French State as first shareholder of the company, the French Autorité des Marchés Financiers the Board of directors of the company to proceed as soon as possible with the court request for the dismissal  under the "récusation" process  of article L823-6 or under the "relèvement judiciaire" of article L823-7 of the two independent acting audit firms appointed by the Board and the shareholders of Renault, ERNST & YOUNG Audit ( EY) and KPMG Audit (KPMG),.“


The reason of this request is the likeliness of negligence as these auditors failed to control or detect that a number of the alleged transactions of the management of both Renault and Nissan groups were arranged with related parties while some remuneration items for the CEO were not disclosed to investors in breach of the auditors and the automotive companies disclosure obligations.

All the hereunder mentioned alleged transactions or remunerations should have been subject to the French legal public disclosures  and/or to the French related party transactions approval proceedings, but were not. Most of them were known by the auditors, and many of them could have been suspected and prevented by appropriate actions allowing directors and shareholders of the companies to act.     

Responsibility of the independent auditors of the Renault-Nissan Alliance group.

The major audit firms generally boost that their international network is a benefit for their multinational clients and for the shareholders of these companies. EY is the independent auditor of both Renault and Nissan Motors, a 43% Japanese subsidiary of Renault, and KPMG is joint-auditor at Renault.  

On November 19, 2018, Nissan Motor Co., Ltd disclosed that the company’s Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly had for years underreported compensation amounts in Tokyo Stock Exchange securities reports to reduce the disclosed amount of these compensations. Over the past decade, Nissan reported paying its president Carlos Ghosn ¥1 billion per year in compensation, but in truth, Nissan paid Mr. Ghosn an additional ¥1 billion per year in the form of deferred compensation, but failed to disclose these payments in the company’s publicly filed financial reports, and that as a result, Nissan underreported its CEO true pay over the decade by an estimated ¥10 billion. 

Nissan Motor Co., Ltd. also disclosed on the same day other “significant acts of misconduct” by Ghosn, including personal use of company assets. 

According to the Japanese Asahi Shimbun newspaper (see hereunder:  REUTERS November 28, 2018  “Auditor had questioned Nissan on payments to Ghosn”) , the auditor of Nissan Motors, Ernst & Young ShinNihon, a member of the EY world network,  indicated to have questioned several times since 2013 the Nissan management about different transactions including the purchase and renovation of luxury houses by a € 70 million cash rich Dutch subsidiary of Nissan  Zi-A Capital BV, a shell company chaired by Carlos Ghosn until 2012. A home in Lebanon was purchased in 2012 for $9.5 million and renovated at a cost of $7.2 million.

EY ShinNihon had been auditor for Toshiba Corp. and Olympus Corp. during financial scandals at the two Japanese companies in recent years. EY as one of greatest audit firm in the world must be aware worldwide of the French rules concerning related party transactions.

Under the French article L 823-12 independent auditors should inform the general meeting of shareholders or the Board any irregularity or inaccuracy they have observed during their mission  Under the article L 225-38 that   “Any agreement that intervenes directly or by an interposed person between the company and one of its general Directors, one of its directors, one of its shareholders with a fraction of voting rights exceeding 10% (..) must be subject to the prior authorization of the board of Directors ”  and must be  included in a special  listing signed by the auditors to be later approved by non-beneficiary shareholders at the annual general meeting.

This real-estate transaction was clearly never reported by the Nissan and Renault chairman Carlos Ghosn or his aides in the special report signed by EY for Renault directors and shareholders. EY knew it, “questioned Nissan’s management several times” but did nothing else   either to stop these transactions or to proceed with le legal authorization proceedings.  

A series of significant acts of misconduct reported by the press   

It appeared since in the press that several other major transfers for the direct or indirect benefit of Carlos Ghosn have been undertaken through different subsidiaries or co-subsidiaries of Nissan Motors and/ or Renault SA.

1/ For the CEO  himself, according to the press, the Japanese prosecution alleged:  

-          the transfer to Nissan of Foreign exchange contracts carrying 1.85 billion yen in unrealized losses from  a personal investment contract then following a retransfer of the contract back to him in February 2009, the payment by Nissan Middle East, a Nissan subsidiary based in the United Arab Emirates, of 1.3 billion yen to a company owned by Khaled Juffali between 2009 and 2012.  

-          a $8.8 million payment made in 2018  by a 50-50 venture between Nissan Motor Co. and Mitsubishi Motors Corp., set up in 2017 in Amsterdam a special undisclosed transaction bonus,  

-          a payment $5 million to himself the Oman dealership, Suhail Bahwan Automobiles (SBA), from a 15 million transfer by a Nissan subsidiary called Nissan Middle East based in the United Arab Emirates from December 2015 to July 2018.

-          the rental, purchase and/or  renovation for his exclusive personal use of luxury housing  including a house in Lebanon and apartments in Amsterdam, Paris, Tokyo and  Rio de Janeiro for an estimated USD one million yearly charge.

-          and the hiding of unreported differed pay amounts by Nissan of  $43 million (5 billion yen) in compensation for 2010-2015 about 1 billion yen ($9 million) each year that he had arranged to receive later

2/ For his son Anthony Ghosn, the indirect benefits from the transfers to Suhail Bahwan Automobiles (SBA) of funds which, according to the Asahi Shimbun, in part ended up at GFI a Lebanese personal company which from 2015 to 2018,  offered $27.5 million in financial assistance to a company Shogun set up  in the United States

3/ For his sister Claudine Bichara de Oliveira the benefit of yearly substantial cash payments totaling  $1.7 million from the Japanese automaker and the permanent residence in a Nissan beach front apartment in Rio de Janeiro.

4/ For friends and relatives : according to the press sixteen mostly Lebanese VIP friends with his sister were invited by Carlos Ghosn to the Rio carnival in February 2018 for total expenses exceeding USD 100 000. Besides, the French and Lebanese press had reported the occurrences  the celebration of a personal anniversary in 2016  in the castle of Versailles, as recognized by Renault on February 7. 2019, and of a gala dinner on March 9 2014 for Carlos Ghosn 60 th. birthday for expenses of respectively € 50 000 euros  and € 636 000 paid by the Renault group. 

The Reuters agency reports (February 1st.  2019 “Renault-Nissan payments to political advisers draw scrutiny ”),  several payments made by the Dutch joint venture company  Renault-Nissan  BV lacked transparency and  are under scrutiny.  “Spending on advisers appeared in RNBV accounts as a single line for consultants’ fees, which exceeded 20 million euros in 2015.”  

Under French law, all of these transactions, when relating directly or indirectly to the Chairman and CEO of Renault, Carlos Ghosn, should have been first reported by the Chairman to the Board of Directors and carried by the Auditors in the special report on related party transactions signed each year by the representatives of EY and KPMG for a final approval vote by the general meeting of shareholders. It appears clearly that while EY as a group and KPMG have been aware of several of these transactions managed by Carlos Ghosn for his own direct and indirect benefit none of these were reported to the Directors nor to the shareholders of Renault. The independent auditors of Renault knew of it and, despite of substantial service fees, did not engage appropriate means.



Pierre-Henri Leroy                                      

With special thanks for their support to Baudoin de Pimodan, Yves Thomazo,  Loïc Dessaint, Loïc de la Cochetière, Nicolas Boucant.

                                                                                                   May 2019

Reuters November 28. 2018

Nissan Motor Co.’s auditor had repeatedly questioned transactions at the heart of allegations of financial misconduct by former chief Carlos Ghosn but Nissan said they were proper, a person with direct knowledge of the matter said on Wednesday.

Ernst & Young ShinNihon LLC questioned Nissan's management several times, chiefly around 2013, about purchases of overseas luxury homes for Ghosn’s personal use and of stock-appreciation rights that were conferred on him.

But the Japanese automaker said the transactions and financial reporting were appropriate, the source told Reuters on condition of anonymity.

The revelation shows Nissan and its auditor were discussing the transactions, in apparent contrast with Nissan’s contention that the alleged misreporting of benefits for Ghosn was masterminded by Ghosn and a key lieutenant.

A spokesman for EY ShinNihon, the Japanese affiliate of global accounting firm Ernst & Young, said he could not comment on specific cases. A Nissan spokesman declined to comment.

Ghosn was arrested on Nov. 19 as he arrived in Japan. Prosecutors accuse him of falsifying Nissan’s annual reports to understate by about half his total compensation of some 10 billion yen ($90 million) over several years.

The high-profile former executive has denied the allegations, according to Japanese media. Ghosn remains in custody and is unable to speak publicly. He is represented by former prosecutor Motonari Otsuru, according to Japanese media.

Otsuru’s law firm declined to comment on Wednesday, and Otsuru has not responded to requests for comment.

Nissan has largely pinned the blame on Ghosn and Greg Kelly, a former representative director who was arrested along with Ghosn on the same allegations.

“As a result of the investigation, we are certain these two are the masterminds,” CEO Hiroto Saikawa told a news conference on Nov. 19, referring to Ghosn and Kelly. He declined to say whether others at Nissan were involved in the alleged wrongdoing. An internal investigation is ongoing, and Nissan says it is cooperating with prosecutors.

Nissan and Mitsubishi Motors Corp. have removed Ghosn as chairman in the wake of his arrest. The French member of the three-firm alliance, Renault SA, retains him as chairman and CEO.

EY ShinNihon questioned Nissan management about Zi-A Capital BV, asking whether the Dutch unit--which purchased the overseas homes for Ghosn's use--was conducting business in line with its stated aim as an investment company, said the source, who is not authorized to speak publicly on the matter.

The car maker said Zi-A was conducting its business appropriately, the source said. Japanese media have valued the transactions at more than 2 billion yen.

Similarly, the source said, the auditor asked whether the stock-appreciation rights--which are like stock options but pay out in cash if a share rises to a certain price--should be declared, but Nissan replied that was not necessary. Japanese media say the rights were worth some 4 billion yen.

EY ShinNihon had been auditor for Toshiba Corp. and Olympus Corp. during financial scandals at the two Japanese companies in recent years.

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