TOKYO -- The tug of war between Nissan Motor Co. and Renault SA over leadership within the troubled Japanese auto giant looks set to be prolonged as the French carmaker is demanding Nissan hold an extraordinary shareholders meeting to bring a new representative into the firm to replace former Chairman Carlos Ghosn, a request Nissan has shunned.
Nissan's board of directors decided on Dec. 17 to put off picking a successor to former Chairman Ghosn, 64, who is accused of underreporting his remuneration over several years. "We have confirmed that we will continue to discuss the matter," Nissan President Hiroto Saikawa said later in the day at company headquarters in Yokohama, south of Tokyo. He said the timing for naming the new chairman "has yet to be decided," suggesting that the post will be vacant for the time being.
The board of directors also decided to set up a special third-party committee comprising outside directors and experts to discuss how to revamp Nissan's corporate governance, after an overconcentration of power in Ghosn is said to have led to the alleged financial irregularities.
While the firm had initially planned to have a panel of three outside directors select a candidate as Ghosn's successor from among current board members and propose the decision at a board meeting, the panel put off the proposal after calls intensified for revamping corporate governance first before selecting the new chairman.
At a press conference following the board meeting, President Saikawa explained that the three outside directors on the panel "reported that they had better choose the new chairman after discussion at the special third-party committee has been concluded," suggesting that the appointment of the new chairman will follow the independent panel's decision on a new governance plan.
Behind Nissan's postponement of a personnel decision lies a struggle with Renault, the largest shareholder with a 43.4 percent stake in Nissan, over the post-Ghosn management of the company. Renault has retained Ghosn as chairman and chief executive after its board of directors decided on Dec. 13 that there were no legal violations over his remuneration at the firm.
According to individuals familiar with the situation, an outside director hailing from Renault demanded at the panel meeting with other external directors that ample time be spent on the selection of the new Nissan chairman. "Renault is likely attempting to buy time to recast its strategy (to take the initiative) by prolonging the selection of the new chairman," said a senior Nissan official.
In a related development, Renault had sent a letter on Dec. 14 to President Saikawa demanding that Nissan hold an extraordinary shareholders meeting, according to people associated with Nissan. The move is believed to be aimed at exercising Renault's power as Nissan's primary stockholder over the latter's decision-making process. Some observers speculate that Renault is aiming to urge Nissan to sack Ghosn as director at a shareholders meeting to send in a new director.
An accord between Nissan and Renault dictates that those hailing from Renault are to comprise less than half of Nissan's directorship. Based on this accord, Nissan turned down a Renault request in late November that it be allowed to bring in a new director as a candidate to replace Ghosn.
Despite Renault's calls for holding an extra shareholders meeting at an early date, President Saikawa indicated that Nissan will not be holding such a meeting until April next year or later, after the third-party panel comes up with a proposal to enhance corporate governance. This policy makes it difficult for Renault to dispatch a new director to Nissan, prolonging the leadership struggle between the two firms even further.
(Japanese original by Naoya Matsumoto and Shiho Fujibuchi, Business News Department)