Renault Board Will Resist French Government Power Grab

Renault SA's directors vow to fight an attempt by the French government to defeat the board's desire to adopt a "one-share, one-vote" policy for stockholders.

At issue is France's one-year-old Florange law, which grants double voting rights to those who own stock in public companies for more than two years. France, which owns 15% of Renault, wants the company to accept the law, thus giving the government more clout over Renault's domestic employment policies.

The measure also would strengthen the government's ability to defend Renault against a foreign takeover.

Companies can block the law if two-thirds of its shareholders agree to do so. The board has asked shareholders to vote against the Florange law at their April 30 annual meeting.

Last week France spent about €1.2 billion to boost its Renault holding to nearly 20%, specifically to block the company's resolution. Analysts say the government's expanded stake could be enough to prevent a two-third vote in favor of the proposal.

Renault's board fears the government's move will disrupt the company's highly successful partnership with Nissan Motor Co. Renault owns 43% of Nissan, a stake that includes full voting rights in the Japanese company. Nissan reportedly is unhappy with its 15% nonvoting stake in Renault.