Renault urges Nissan to call a shareholders meeting after Nissan accusation
Paris-
Renault
SA
presses
Nissan Motor
to open a discussion in the balance of power against the Japanese car maker after prosecutors charged their former leader Carlos Ghosn and the Japanese company with financial failure.
Thierry Bolloré, deputy chairman of Renault, who owns 43.4% of Nissan, sent a letter dated 1[ads1]4 December to Nissan's CEO Hiroto Saikawa, urging him to call a shareholders meeting "as soon as possible" that would allow a Discussion of Renault Nissan's Board, meeting Monday, has been without a leader since Japanese prosecutors, acting on a tip from Nissan, arrested Mr. Ghosn with suspicion of financially bad behavior. Nissan then ran Mr. Ghosn as leader.
Nissan's "accusation creates significant risks for Renault, like Nissan's largest shareholder and the stability of our industrial alliance," wrote Bolloré in the letter. "We believe that a shareholder forum would be the best way to handle these issues in an open and transparent manner."
Renault has not received a reply from Mr. Saikawa, according to a person familiar with the case. Nissan did not respond to requests for comment.
The letter is a sign of how the arrest of Mr. Ghosn-once glued that held the companies together – testing the strength of the world's largest auto-making alliance. 19659008] On 10 December, Tokyo prosecutors Nissan and Ghosn claimed to report only about half of the manager's compensation to the Japanese company during the five years ended March 2015. The accusations said his true compensation increased to equivalent to around $ 87 million during the period, but the company's financial reports said it was $ 44 million.
Herr. Ghosn, arrested in Tokyo on November 19th and still in jail, has denied a crime, according to the Japanese public broadcaster NHK. The office of his leading Japanese lawyer, Motonari Otsuru, has rejected a request for comment. Nissan has apologized for what is called "false information" and said it would improve its management.
Public, Renault and Nissan have said they will continue the partnership, which allows automakers to share technology and platforms. Behind the scenes, however, employees in both companies say that distrust grows.
Renault bailed out Nissan in the late 1990s, but since then, Nissan has grown to be the largest of the two companies. This has led Nissan leaders to privatize Renault's confidence in the Japanese automaker to throw his bottom line.
A shareholders meeting would allow Renault to renew its pressure to appoint a successor to Ghosn on Nissan's board.
In a letter from November to Renault's Board, Nissan said that it would not allow Renault to name a successor because Ghosn is one of Renault's three board members. According to Nissan, Renault is not entitled to further representation on the Nissan board .
Herr. Bolloré pushed back in the letter dated December 14, writes that a shareholder meeting "would enable appropriate publicity and discussion of governance and other issues, including Renault representatives on the Nissan board and top management."
In a previous letter Mr. Bolloré sent to Saikawa on December 13, French leader Nissan asked to give "full and quick disclosure" of what it knows about the Japanese car manufacturer's accusation and demanded an assessment of how it would affect its business and senior management. Nissan's accusation, Mr. Bolloré wrote, "is deeply worrying for us, and it raises major concerns about questions about the company's integrity, governance and internal controls."
Herr. Ghosn remains also chairman and chief executive officer of Renault, although his management duties have been delegated to Mr. Bolloré while Ghosn is still in jail.
Under the rules governing his alliance, Renault may urge Nissan's board to call an "extraordinary" shareholder meeting, but must stop short to call one by one. Mr. Saikawa can now put Renault's proposal to the Nissan Board, or choose to ignore it. If Mr. Saikawa transmits the request, there is no certainty that it will pass.
Dieter Zetsche, head of German car maker
Daimler
AG
, which holds 3.3% of Nissan, is copied on Mr. Bolloré's December 14 letter. Mr. Zetsche has suggested that he supports Renault's call for a meeting of Nissan shareholders, according to a person familiar with the case. A spokesman from Daimler refused to comment.
Write to Nick Kostov at Nick.Kostov@wsj.com
