Tue, Nov 27, 2018 - Page 10 News List

Nissan endeavoring to curb Renault’s right to select alliance board members

Bloomberg

Nissan Motor Co is accelerating its bid to redress imbalances in the world’s biggest auto alliance after Carlos Ghosn’s arrest, seeking to limit the power of partner and top shareholder Renault SA to nominate officials to its board, people familiar with the plan said.

The Japanese automaker also wants to renegotiate Renault’s power to appoint the head of the company that holds their alliance together, the people said, asking not to be identified as having discussed private matters.

The downfall of Ghosn, who engineered the alliance between Renault and Nissan, risks igniting a battle for power between the two automakers that could devolve into one of the toughest contemporary corporate battles.

While both sides say they are committed to the partnership, Nissan has moved swiftly to gain the upper hand since it revealed a week ago that an investigation found Ghosn had under-reported his income and misused company assets.

Nissan, which last week dismissed Ghosn as chairman, is seeking a review of the alliance’s structure and voting rights, people familiar with the situation said last week.

The two companies and their third, smaller partner, Mitsubishi Motors Corp, are due to meet in Amsterdam this week.

Nissan does not expect that capital changes will be discussed at the meeting, a person familiar with the matter said.

Nissan views that negotiations about rebalancing ties should be done with mutual understanding, and that the firms must first share an understanding about the need to dismiss Ghosn, the person said.

A Nissan spokesman declined to comment.

Ghosn is still chairman of the alliance’s board, while Nissan chief executive officer Hiroto Saikawa is vice chairman.

Calling the alliance “indispensable,” French Minister of Finance Bruno Le Maire on Sunday said that he wants to strengthen it while maintaining the rules that require Renault’s chairman to serve in the same role at the head of the alliance.

Ghosn was arrested on Monday last week and Nissan dismissed him as chairman on Thursday. Mitsubishi, which joined the alliance in 2016, is due to vote today on removing Ghosn as its chairman.

Renault stopped short of dismissing the 64-year-old, instead naming deputy Thierry Bollore as interim CEO.

In an address to Nissan’s global employees on Monday last week, Saikawa said Ghosn held too much power at the company.

Conversations between Nissan and Renault had to go through Ghosn, who also had the final say on matters, which made such communications less meaningful, he added.

Saikawa also said he feels that he enjoys the trust of Renault’s top management, having worked with them frequently.

Renault, which has the French state as its biggest shareholder, has a 43 percent voting stake in Nissan, which in turn owns just 15 percent of Renault, with no voting rights. Nissan has also long been irked by what it sees as the French government meddling in the alliance.

The structure has become increasingly controversial in Japan due to Nissan’s improved performance.

Nissan sold about 5.8 million cars last year — compared with just 3.7 million for Renault — and provides links to China, where Renault has only a small presence, and to the US, where the French automaker is absent.

According to Japanese corporate law, Renault’s voting rights could be canceled if Nissan raises its shareholding to more than 25 percent in the French automaker. Under French rules, if Renault lowered its stake in Nissan to less than 40 percent, then it would help the Japanese automaker get voting rights in the French company.

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