Renault Share Price Dives After CEO Arrested

Will the firm manage to survive?


Renault’s stock price dropped by nearly 10% after reports of Renault CEO, Carlos Ghosn, was arrested in Japan in relation to financial violations. Carlos Ghosn is the CEO of Renault and Nissan Motor of Japan (including Mitsubishi Motors).

The Renault stock price fell as investors are now worried that the Nissan and Renault merger may not happen due to the arrest of Ghosn.

During Monday’s trading period, Renault shares fell to €58.72 euros, then recovered slightly. The investigation into Ghosn showed that he was using company money to fund his private life. Nissan has said that Ghosn will be removed as CEO because of the allegations.

Nissan said this in their statement “The investigation showed that over many years both Ghosn and (Greg) Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,”

Many investors think that Ghosn is the leader of Nissan’s recent triumphs and the resurrection of the company. If this is the case then can Nissan survive without his leadership?

Renault Stock Price

Renault’s market valuation fell considerably after the news broke, with the Renault stock price falling by 8.4%. It is likely that once the company is clear on how the allegations will impact the Nissan merger we will see the share price settle.

Renault share price on the German index dropped by 6.4 percent.

Ghosn joined Nissan after Renault bought a controlling stake in the company. He became the CEO in 2001. Renault owns 43.4% of Nissan shares, with Nissan owning 15% of Renault and 34% of Mitsubishi shares. Ghosn was the driving force behind these partnerships, in turn creating one of the top-four car firms due to a cluster of linked shareholdings across the individual companies. Mitsubishi stock price has not reacted well to the news, casing significant declines on Monday.

Aerospace stocks to watch this quarter.