Business World

Sunday 25 August 2019

Renault and Nissan seal deal on governance

Photo: PA
Photo: PA

Ania Nussbaum, Ma Jie and Kae Inoue

Renault has said it welcomed a decision by partner Nissan to grant a seat on its board committees to representatives of the French carmaker, indicating that a dispute at the centre of the world's largest automotive alliance is nearing a resolution.

The accord could be a step toward mending relations, after Renault Chairman Jean-Dominique Senard threatened to abstain from voting on a governance plan at Nissan's annual meeting next week without more board representation. His warning came shortly after Nissan failed to support a merger between Renault and Fiat Chrysler.

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The Japanese company will give Renault CEO Thierry Bollore a seat on the board's audit committee and Mr Senard a position on the appointment committee - key positions at the heart of decision-making, people familiar with the matter said. Renault now expects to support Nissan's resolutions during the investor meeting on June 25, said the people, asking not to be identified.

"The agreement reached on Renault's presence in Nissan's new governance confirms the spirit of dialogue and mutual respect that exists within the alliance," Renault said.

While tensions between the partners have never been higher, both sides have indicated they have little choice but to patch up their two-decade alliance. The partnership has proven one of the most successful among carmakers, generating €5.7bn in savings in the 2017 financial year, the companies estimate.

Yet the alliance has grown increasingly fractious since the November arrest of former leader Carlos Ghosn on accusations of financial misconduct, which he has denied.

In the aftermath, a joint audit found transparency breaches and a lack of adequate financial controls at RNBV, the Amsterdam-based company that managed the alliance.

Since then, RNBV has been shrunk, its executives reassigned to their respective companies and common services, such as communications and legal, appear to be dormant.

The lopsided shareholding arrangement between the firms has been a long-running source of friction: Renault's 43pc stake in Nissan comes with voting rights, while Nissan's 15pc holding in Renault does not. The role of France, Renault's most powerful shareholder, has also irked Nissan. A fear of losing power led it to rebuff a Renault merger approach in April.

Still, common projects continue to emerge. The three-way alliance, which includes Mitsubishi, unveiled a partnership yesterday to explore driverless services in France and Japan with Waymo, the autonomous-vehicle unit of Google parent Alphabet.

Bloomberg

Irish Independent

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