Renault to Block Nissan Governance Reforms

Renault SA says it will block planned management reforms at alliance partner Nissan Motor Co. unless it can retain its clout with the Japanese carmaker, the Financial Times reports.

The newspaper cites a letter from Renault Chairman Jean-Dominique Senard to Nissan CEO Hiroto Saikawa. In it, Senard says that Renault, which owns 43% of Nissan, intends to abstain from supporting the reforms, thereby blocking the two-thirds majority required to approve them.

The reforms would replace Nissan’s use of statutory auditors with three committees covering audits, nominations and executive remuneration. They were prompted by last November’s arrest of Carlos Ghosn, then-chairman of both companies, on charges of financial wrongdoing at Nissan.

Senard frets that the restructuring could diminish Renault’s influence at Nissan, according to FT. His letter on Saturday came days after Nissan helped torpedo an offer by Fiat Chrysler Automobiles NV to merge with Renault, in which it holds a 15% stake. Nissan, which was belatedly advised about the FCA bid, said last week it would abstain from supporting the offer pending further details about the deal and its impact on the 20-year-old Renault-Nissan alliance.

Senard, who sits on Nissan’s board, had previously supported the three-committee plan. FT says his reversal, coming two weeks before Nissan’s annual meeting, is being condemned in Japan as “outrageous and irresponsible.”

The sources speculate that Senard is trying to push Nissan to back the FCA or agree to merge with Renault. Nissan has strongly rebuffed the later overture for more than a year.