Renault, Nissan At Odds Over New Governance System

The Renault-Nissan alliance is shaky after Renault (RNSDF) said the company wanted a greater part in Nissan's (NSANY) new governance system since the ouster of former Renault CEO Carlos Ghosn in January.

Renault is Nissan's biggest shareholder, with the French company having a 43.4% stake in Nissan.

The new governance overhaul will add three committees covering nominations, renumerations and audit. But Renault chairman Jean-Dominique Senard has threatened to block the reform before the organization votes on the proposal on June 25, which would throw away Nissan's work on the changes.

The governance changes "should not serve as a tool directed or used against Nissan's largest shareholder," Senard said in a letter sent to Nissan CEO Hiroto Saikawa.

"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," Nissan said in a statement.

Former Renault CEO Carlos Ghosn had attempted to make Renault and Nissan's alliance "irreversible" and Nissan is concerned about the influence of the French government's operations on Renault, Bloomberg reported. The French government owns 15% of Renault.

Earlier this month Fiat-Chrysler Automobiles (FCA) attempted a merger agreement with Renault, but the deal failed, likely due to "political conditions in France" and the influence of the French government, Forbes reported.

Ghosn was arrested last year at Tokyo airport due to questionable payments and misuse of company funds. On April 8, 2019 Nissan shareholders voted Ghosn off the company's board.