Nissan rejects Renault's request to send successor to replace Ghosn

05, Dec. 2018

TOKYO, Kyodo - Nissan Motor Co. has rejected partner Renault SA's request to send a successor with equal authority to replace ousted Chairman Carlos Ghosn, sources close to the matter said Tuesday, in a heightening leadership tussle at one of the world's biggest automaker groups.

Renault, Nissan's top shareholder which has retained Ghosn as CEO and chairman following his arrest last month for alleged financial misconduct, made the request during the Japanese automaker's emergency board meeting on Nov. 22, according to the sources.

The proposal was made to protect its business interests and maintain its influence within Nissan following Ghosn's dismissal, the sources said.

But regarding the future relationship with Renault, Nissan CEO Hiroto Saikawa has said he wants to review the management structure, believing that the excessive concentration of power in Ghosn had undermined transparency and governance.

Ghosn, known for saving Nissan from the brink of bankruptcy, was sent to the Japanese automaker from Renault in 1999 as chief operating officer. He became Nissan president in 2000 and served as chief executive officer from 2001 to 2017.

Saikawa also views Nissan's relationship with Renault as unbalanced and favoring the French carmaker. Although it generates smaller earnings than Nissan, Renault owns a 43.4 percent stake in the Japanese automaker, which holds only a 15 percent stake in its French peer, but without voting rights, and 34 percent in Mitsubishi Motors Corp., the third alliance partner.

Under the current agreement between Nissan and Renault, the Japanese automaker is to receive senior executives from the French peer, other sources said earlier.

Saikawa, Renault's acting CEO Thierry Bollore and Mitsubishi Motors CEO Osamu Masuko agreed on Nov. 30 to lead the three-way alliance through a consultative process between them, in an apparent departure from the decision-making process mainly until now led by the partnership's CEO and Chairman Ghosn, according to the Japanese executives.

Still, the struggle for leadership is expected to continue as under the current accord between Nissan and Renault the post of CEO and chairman of the alliance is to be assumed by someone from the French automaker, analysts said.

The French government, the largest shareholder in Renault, has also stepped up efforts to keep Renault's strong control over the alliance.

It has said that a person from Renault should continue to lead Renault-Nissan B.V., an Amsterdam-based company in charge of overseeing the partnership, and that the current cross-shareholdings should be maintained.

For French President Emmanuel Macron, who has seen recent sagging support ratings and street protests triggered by fuel tax hikes initially planned for January, it is crucial that Renault maintains its role in the country's economy while creating jobs, analysts said.

At the Nov. 22 meeting, the Nissan board decided to dismiss Ghosn as chairman and set up a three-member panel comprised of external directors to select his successor from among the current board members.

The three independent directors held their first meeting on Tuesday to discuss who should succeed Ghosn as chairman, but did not reach a conclusion, according to Nissan officials.

The board is expected to formally approve the successor at its meeting on Dec. 17. One of the plans is to have Saikawa double as interim chairman, the sources said.

Ghosn was arrested by Tokyo prosecutors on Nov. 19 on suspicion of violating Japan's Financial Instruments and Exchange Act by underreporting his remuneration by a total of about 5 billion yen ($44 million) over five years to March 2015. (Kyodo)