Renault to block Nissan reshuffle

AFP, TOKYO

Tue, Jun 11, 2019 - Page 10

French automaker Renault SA has warned its alliance partner Nissan Motor Co that it would block the Japanese automaker’s plan to overhaul its governance structure, Nissan confirmed yesterday, a move it called “regrettable.”

The Japanese firm said in a statement that it had received a letter from Renault “indicating the intention to abstain from voting,” a move that would mean that the proposed changes would fall short of the two-thirds majority needed to pass.

“Nissan finds Renault’s stance on this matter most regrettable, as such a stance runs counter to the company’s efforts to improve its corporate governance,” chief executive Hiroto Saikawa said in a statement.

Renault’s decision, first reported by the Financial Times, was taken over fears that the proposed governance changes could reduce its influence, the newspaper said.

The move by Renault, which is Nissan’s largest shareholder, is likely to further strain ties between the two firms after the shock arrest of former boss Carlos Ghosn.

A spokesman for Renault had no comment.

Renault is pushing for a full merger between the pair, but there is deep skepticism of the plan at Nissan.

Fiat Chrysler Automobiles (FCA) NV last month stunned the auto world by proposing a merger with Renault that would — together with Renault’s Japanese partners Nissan and Mitsubishi Motors Co — create a car giant spanning the globe.

However, the deal collapsed on Thursday, with the Italian-US automaker FCA saying that negotiations had become “unreasonable” due to political resistance in Paris.

The two firms are exploring ways of reviving their merger plan, with their chairmen discussing the possibility, Reuters reported, citing unidentified people close to the automakers.

The two automakers are looking for ways to get an approval from Nissan, Reuters added.

Relations between Renault and Nissan have been tested over the arrest in November last year of their joint boss, Ghosn, who awaits trial in Japan.

Nissan has said that the alleged misconduct was the result of governance failings, and that the proposed overhauls are necessary to ensure wrongdoing is not possible.