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Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance, is seen in Boulogne-Billancourt, near Paris, France, on Feb. 12, 2016.

Benoit Tessier/Reuters

France’s Finance Minister said on Sunday that a severance package for former Renault chief Carlos Ghosn, forced to resign in a financial scandal, should not be “exorbitant” and that the French state would follow the matter closely.

Renault, which this week appointed a chairman and chief executive tandem to replace Mr. Ghosn, has yet to finalize its former boss’s severance package, a potentially explosive issue in France where the government is facing protests over low pay and inequality.

“No one would understand if the severance pay of Carlos Ghosn were exorbitant,” Bruno Le Maire told France Inter radio.

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“We are going to be extremely vigilant.”

The French state is Renault’s largest shareholder, with a stake of about 15 per cent, and holds two board seats.

Mr. Ghosn resigned from his Renault role last week under pressure from the French government following his arrest in Japan in November and indictment there for financial misconduct. He denies any wrongdoing.

The scandal has strained Renault’s alliance with Japan’s Nissan, an industrial partnership Mr. Ghosn built into a global car-making giant over two decades.

France’s CGT union has estimated Mr. Ghosn’s severance package is worth between €25-million and €28-million ($37-42-million), in addition to an annual pension of €800,000 ($1.2-million).

Mr. Le Maire declined to say what he thought would be an acceptable payoff for Ghosn, but said the government had previously succeeded in getting Mr. Ghosn’s 2018 pay package reduced by 30 per cent from his 2017 total of €7.4-million ($11-million)..

The Finance Minister also said he would propose in coming months legislation to require bosses of large companies based in France to make the country their tax domicile.

The changes would target in particular big firms listed on the CAC-40 and SBF-120 indexes on the Paris stock market, along with groups in which the state has a holding, Mr. Le Maire said.

The legislation would include sanctions for company chiefs who breach the rule, he added.

Reuters

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