Nissan to seek review of Renault shareholding
Balance of power at the Japanese automaker is now tilted towards CEO Saikawa
Nissan Motor Co will seek a review of the shareholding structure of its alliance with Renault, moving to create a more equitable partnership between the two carmakers just days after Carlos Ghosn’s shock arrest, according to a person familiar with the plans.
The review will cover the issue of voting rights, the person said, asking not to be identified as the information isn’t public. Renault has more influence in Nissan than the Japanese company has in its French partner, a point of tension throughout their two-decade-long relationship.
The plan signals Nissan is moving swiftly to gain a stronger Nissan’s disgraced former chairman Carlos Ghosn under-reported his income by a total of $71 million (Dh261.13 million) — much more than initially suspected — Japanese media reported yesterday.
Prosecutors arrested Ghosn last Monday, accusing him and fellow executive Greg Kelly of understating the former chairman’s income by around five billion yen ($44 million). But Ghosn is now suspected of under-reporting his income by another three billion yen for the following three fiscal years, the and the business daily reported. Prosecutors are now planing to re-arrest him on charges of understating his income by a total of eight billion yen ($71 million).
Under Japanese law, suspects in jail can face additional arrest warrants, which can impose heavier charges. position in the alliance, with Ghosn out of the picture. The French-Brazilian executive, who steered both Renault and Nissan for years and had worked towards a merger of the companies, was removed as Nissan’s chairman on Thursday after his arrest in Japan for suspected financial offences, inclusing understatement of his salary.
The balance of power at Nissan is now tilted towards chief executive officer Hiroto Saikawa, who has emerged as a driving force behind the investigation into Ghosn’s alleged wrongdoing. The French side, meanwhile, has appeared blindsided by the rapidly unfolding events. Saikawa, an opponent of a merger between the companies, may be seeking to improve the Japanese carmaker’s bargaining position in a partnership he says has for too long favoured the French side.
Renault owns 43 per cent of Nissan and has the right to vote on decisions by the board, while the Japanese carmaker holds 15 per cent of the French company, but doesn’t have voting rights. That imbalance has existed since the alliance was formed in 1999 as a way to gain scale against global competitors. Mitsubishi Motors Corp. was added to the pact in 2016.
A Nissan spokesman didn’t answer a phone call and an email seeking comment on a public holiday in Japan.
According to Japanese corporate law, Renault’s voting rights could be cancelled if Nissan raises its shareholding to more than 25 per cent in the French carmaker. Under French rules, if Renault lowered its stake in Nissan below 40 per cent, then it will help the Japanese carmaker get voting rights in the French company.