Renault Pressures Nissan on Alliance -- WSJ
17 December 2018 - 7:02PM
Dow Jones News
By Nick Kostov
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 17, 2018).
PARIS -- Renault SA is pressing Nissan Motor Co. to open a
discussion into the balance of power atop the Japanese auto maker
after prosecutors charged its former chairman, Carlos Ghosn, and
the Japanese firm with financial misconduct.
Thierry Bolloré, deputy CEO of Renault, which owns 43.4% of
Nissan, sent a letter dated Dec. 14 to Nissan CEO Hiroto Saikawa
urging him to call a shareholder meeting "as promptly as
practicable" that would allow a discussion of Renault's
representation on Nissan's nine-member board and within the ranks
of its top managers.
Nissan's board, which meets Monday, has been without a chairman
since Japanese prosecutors, acting on a tip from Nissan, arrested
Mr. Ghosn on suspicion of financial misconduct. Nissan then ousted
Mr. Ghosn as chairman.
Nissan's "indictment creates significant risks to Renault, as
Nissan's largest shareholder, and to the stability of our
industrial alliance," Mr. Bolloré wrote in the letter. "We believe
a shareholder forum would be the best manner of addressing these
matters in an open and transparent fashion."
Renault hasn't received a response from Mr. Saikawa, according
to a person familiar with the matter. Nissan didn't respond to
requests for comment.
The letter is a sign of how the arrest of Mr. Ghosn -- once the
glue that held the companies together -- is testing the strength of
the world's largest auto-making alliance.
On Dec. 10, Tokyo prosecutors charged Nissan alongside Mr. Ghosn
on allegations of reporting only about half of the executive's
compensation at the Japanese company during the five years ended in
March 2015. Prosecutors said his true compensation added up to the
equivalent of about $87 million over the period, but the company's
financial reports said it was $44 million.
Mr. Ghosn, who was arrested in Tokyo on Nov. 19 and remains in
jail, has denied wrongdoing, according to Japanese public
broadcaster NHK. The office of his lead Japanese lawyer, Motonari
Otsuru, has declined a request for comment. Nissan has apologized
for what it called "false disclosures" and said it would improve
its governance.
Publicly, Renault and Nissan have said they want to continue the
partnership, which allows the auto makers to share technology and
platforms. Behind the scenes, however, employees at both companies
say mistrust is growing.
Renault bailed out Nissan in the late 1990s, but since then
Nissan has grown to become the larger of the two companies. That
has led Nissan executives to privately grouse over Renault's
reliance on the Japanese auto maker to pad its bottom line.
A shareholder meeting would allow Renault to renew its push to
appoint a successor to Mr. Ghosn on Nissan's board.
In a November letter to Renault's board, Nissan's board said it
wouldn't allow Renault to name a successor because Mr. Ghosn
remains one of Renault's three directors and, in Nissan's view,
Renault isn't entitled to any further representation on the Nissan
board.
Mr. Bolloré pushed back in the letter dated Dec. 14, writing
that a shareholder meeting "would allow for appropriate disclosure
and discussion of governance and other matters, including the
Renault appointees on the Nissan board and in senior
management."
In an earlier letter Mr. Bolloré sent to Mr. Saikawa on Dec. 13,
the French executive asked Nissan to provide "full and prompt
disclosure" of what it knows about the Japanese car maker's
indictment and called for an assessment of how it will affect its
business and senior management. Nissan's indictment, Mr. Bolloré
wrote, "is deeply troubling to us, and it raises significant
concerns with respect to issues of corporate integrity, governance
and internal controls."
Mr. Ghosn also remains chairman and CEO of Renault, though his
management duties have been delegated to Mr. Bolloré while Mr.
Ghosn remains in jail.
Under the rules that govern their alliance, Renault can urge
Nissan's board to call an "extraordinary" shareholder meeting, but
must stop short of formally calling one itself. Mr. Saikawa can now
put Renault's suggestion to the Nissan board, or choose to ignore
it. If Mr. Saikawa does relay the request, there is no certainty
that it will pass.
Dieter Zetsche, chairman of German auto maker Daimler AG, which
holds 3.3% of Nissan, is copied on Mr. Bolloré's Dec. 14 letter.
Mr. Zetsche has indicated he supports Renault's call for a meeting
of Nissan shareholders, according to a person familiar with the
matter. A Daimler spokesman declined to comment.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
December 17, 2018 02:47 ET (07:47 GMT)
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