Renault, Nissan spar over governance reforms as tie-up strains worsen

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Renault, Nissan spar over governance reforms as tie-up strains worsen

Nissan Motor Co believes that attempts by Renault SA to place one of its directors on Nissan's planned governance reform committees may lead to a conflict of interest, a source with knowledge of the issue told Reuters on Monday.

Le Maire's suggestion to reduce France's stake in Renault, if such a move would strengthen the alliance, was dismissed by Nissan, which has also sought a significant reduction in Renault's stake in itself.

Renault threatened to block Nissan's new business structure - which is being put before shareholders - unless it received representation on three new governance committees.

"Nissan finds Renault's new stance on this matter most regrettable, as such a stance runs counter to the company's efforts to improve its corporate governance", it said in a statement.

"It's not a final abstention, and Renault's position can still change", the Renault source said.

Renault is the dominant partner in terms of the capital structure - owning 43 percent of Nissan - but the Japanese firm has outsold its French ally in recent years, sparking complaints that the balance of power was no longer fair.

Renault is now left with its troubled alliance with Nissan and the third partner, Mitsubishi Motors Corp.

The implosion of Renault's merger plans with Fiat brought the conflict into the open, with Nissan's reluctance to endorse the deal said to be partially responsible for its failure.

It's not clear how much of Nissan Renault could relinquish without needing the merger proposal to be restructured. "As things stand, Renault has not been assured of appropriate committee representation as Nissan's main shareholder".

A Nissan source said Renault CEO Thierry Bollore had expressed a desire to sit on new Nissan committees to oversee executive nominations and compensation, and a planned corporate governance auditing committee. The corporate-governance reform "was discussed thoroughly by Nissan's board and approved by all board members, including Renault's own nominees", Saikawa said in a statement.

On May 27, FCA stunned the auto world with a proposed "merger of equals" with Renault that would - together with Renault's Japanese partners Nissan and Mitsubishi Motors - create a vehicle giant spanning the globe. "If there are differences of opinion (with Renault), then I'd like for those to be discussed".

In March a Nissan-appointed outside team recommended the formation of the three committees to improve its corporate governance.

These commissions are being set up to help avoid situations such as those created by Ghosn by handing control over nomination, compensation and audit to three distinct bodies.

"Shockingly, for several months, elements of this "audit" have been circulating in the media without Mr. Ghosn ever receiving it", they said.

By scuppering Nissan's plan and by abstaining from the vote, which would require approval from two-thirds of shareholders, Renault appears to be repaying Nissan in kind, after Nissan threatened (as a shareholder in Renault) to abstain from voting to approve a mooted merger between Renault and Fiat.

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