Renault warns Nissan it will block governance reshuffle

Daniel Fowler
June 12, 2019

The two-decade-old partnership of Renault SA and Nissan Motor Co was plunged into fresh crisis on Monday, as the French automaker's demand for a greater say in Nissan's new governance system drew rare public censure by the Japanese firm.

Bloomberg notes that, shortly after a proposed merger between Fiat Chrysler Automobiles and Renault fell through, French Finance Minister Bruno Le Maire said the administration is willing to reduce its 15 per cent stake at the automaker.

Toby Myerson, one of Elkann's senior advisors, is reportedly heading to Nissan's headquarters in Yokohama, Japan, to have discussions with senior executives, including, possibly, Hiroto Saikawa, Nissan's CEO.

"It's not a final abstention, and Renault's position can still change", the Renault source said.

Sources indicate Nissan could back the merger if it can convince Renault to reduce its shareholding.

A spokesman for Renault contacted by AFP had no comment. "As now proposed, this does not seem to be the case". "As things stand, Renault has not been assured of appropriate committee representation as Nissan's main shareholder".

Carlos Ghosn's lawyers said they're surprised to hear that the board of Renault started proceedings against their client based on an audit report.

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On Sunday, French newspaper Journal du Dimanche reported that Fiat managers informed French authorities on their interest in Renault during the Christmas holidays.

Relations between Renault and Nissan have been tested over the arrest in November past year of their joint boss, Ghosn, who awaits trial in Japan. The French finance minister, who seeks to strike a hard balance between giving autonomy to the companies and pushing a deeper integration between the two, told reporters Sunday that it wasn't "his role" to meet with Nissan's CEO.

The Japanese automaker has always been uneasy over the arrangement, which was strained even further following the November arrest of Carlos Ghosn, the architect and former chairman of the alliance. "If there are differences of opinion (with Renault), then I'd like for those to be discussed".

The proposal calls for three committees to add outside directors and oversee compensation and audit.

Ghosn is awaiting trial and denies the financial misconduct charges against him.

Nissan wants to introduce several governance committees meant to improve oversight and, it says, prevent the financial misconduct allegedly committed by the alliance's former chief Carlos Ghosn, now awaiting trial in Tokyo.

Nissan's profits are tumbling, partly because of costs related to Ghosn's arrest but also because of sales problems in the North American market.

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