Nissan opposing merger plan with Renault

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The Yomiuri ShimbunNissan

Motor Co. has intensified a tug-of-war with its largest shareholder Renault and the French government, as the Japanese automaker is strongly opposed to a business integration plan with Renault that Paris has proposed to Tokyo.

Based on a proposal to be submitted by Nissan’s Special Committee for Improving Governance comprised of outside experts and others, Nissan plans to form a new management team, including the appointment of a new chairman to replace indicted former Chairman Carlos Ghosn, seeking the understanding of Renault.

Since the integration would result in the French government having a stronger influence on Nissan, the automaker would “never accept such an integration,” a Nissan senior official said.

Nissan — which believes it is surpassing its alliance partner Renault both in car sales and technical capabilities — is increasingly dissatisfied with the current state of the Renault-led alliance. While Renault is Nissan’s biggest shareholder and has voting rights, Nissan does not have voting rights in Renault because it only holds a 15 percent stake in the French company.

From here on, if the French government and Renault take a tougher stance concerning Nissan’s management, the confrontation between the French side and Nissan could become more serious. In order to avoid this, Nissan plans to take into account the proposal from independent experts and others and then try to obtain approval from Renault by emphasizing “stronger governance” in the new management, including Ghosn’s successor.

The special committee held its first meeting Sunday and heard directly from Nissan’s senior officials who were involved in Ghosn’s misconduct. It is aiming to compile a reform plan by the end of March.

Speaking to The Yomiuri Shimbun, Sadayuki Sakakibara, who cochairs the committee, said, “While there was a formal system to check Ghosn’s misconduct, it was not functioning properly.”

Regarding the fact that Ghosn served concurrently as Renault’s chairman and chief executive officer, Seiichiro Nishioka, the other cochairman, said, “The problem is that all power was concentrated in a single individual.”

In order to increase transparency in the choice of new directors and decisions on their remuneration, the committee will discuss the establishment of a “nominating committee” and a “remuneration committee,” where the majority of the members are outside directors.

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