Wednesday, 19 June, 2019


Nissan sees conflict of interest if Renault director joins reform teams

France ready to cut Renault stake to shore up Nissan ties: minister Renault-Fiat Chrysler merger idea remains good opportunity, says French Finance Minister Bruno Le Maire
Conrad Doyle | 11 June, 2019, 22:57

Renault has signaled it will block reforms launched by Nissan in the wake of the Carlos Ghosn scandal unless it is granted representation on new board committees, a source close to the French auto maker has told Reuters.

Renault has signaled it will block alliance partner Nissan from adopting planned governance reforms unless the French automaker gets more say in the new system, a demand which Nissan said was "most regrettable" and which one source derided as a potential conflict of interest. Nissan is therefore poised to urge Renault to significantly cut its 43.4 percent stake, two sources told Reuters.

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

Renault and Fiat Chrysler Automobiles (FCA) are looking for ways to resuscitate their collapsed merger plan and secure Nissan's approval for that deal, Reuters reported on Monday.

The corporate-governance reform "was discussed thoroughly by Nissan's board and approved by all board members, including Renault's own nominees", Nissan CEO Hiroto Saikawa said in the company's statement.

Renault is now left with its troubled alliance with Nissan and the third partner, Mitsubishi Motors Corp. "First the alliance (between Nissan and Renault) should be consolidated and then consolidation (more generally) and not one before the other". "As things stand, Renault has not been assured of appropriate committee representation as Nissan's main shareholder".

The source added that even if Renault blocked the committees, Nissan would still try and go ahead and set up similar governance structures, and try to make them as binding as possible.

Over the weekend, Le Maire clarified his comments to Bloomberg, indicating that France isn't in a rush to proceed in this move in the near future, and that it will be done only under certain circumstances.

The French government played a major role in the Renault-Fiat split, having sough to postpone talks until after Le Maire's trip to Japan, so as to seek explicit support from Nissan before going forward. 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.

Japan's Jiji news agency earlier quoted Saikawa as saying: "We are preparing for the shareholder meeting and will discuss necessary issues at the appropriate time". Under the proposal, Renault directors would be free to serve on the nominations committee, but would be barred from the compensation and audit committees. "Based closely on these recommendations, Nissan's board voted unanimously to strengthen corporate governance by transitioning from a company with statutory auditors to a company with three statutory committees", said the CEO.

By scuppering Nissan's plan and by abstaining from the vote, which would require approval from two-thirds of shareholders, Renault appears to be repaying Nissan in kind, after Nissan threatened (as a shareholder in Renault) to abstain from voting to approve a mooted merger between Renault and Fiat.

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