Renault-Nissan’s future is up to private shareholders, Japan tells France

December 1, 2018 10:08 CET

BUENOS AIRES – Japanese Prime Minister Shinzo Abe told French President Emmanuel Macron that the future of the Renault-Nissan alliance was up to private shareholders.

Abe said it was important to “maintain a stable relationship,” a spokesman for the Japanese leader told reporters in Buenos Aires, where Abe and Macron met on the sidelines of the G20 summit on Friday. “However, he said the future of the alliance is up to the private-sector shareholders. The government of Japan does not prejudge the future of the alliance,” the spokesman said.

The French government has repeatedly pressed Japan to share evidence unearthed by Nissan’s internal investigation into its former chairman Carlos Ghosn, who was arrested in Tokyo on Nov. 19 over financial misconduct allegations.

Tokyo authorities on Friday extended Ghosn’s detention for a second time, by the maximum-allowed 10 days, local media reported. Prosecutors must file charges by Dec. 10 or arrest Ghosn for new crimes to hold him beyond that date. Ghosn has denied accusations of understating his income and misusing company funds, according to NHK, Japan’s national broadcaster.

Macron restated “his firm wish that the alliance should be preserved, along with the stability of the group,” an Elysee official said after Friday’s meeting. The official quoted Abe as telling Macron that “the legal process must be allowed to take its course.”

Ghosn’s arrest triggered new attempts by Nissan to reduce Renault’s influence in the alliance. Nissan CEO Hiroto Saikawa has made clear that Nissan wants to weaken the Renault’s control as it carries out a governance review.

Nissan has been eager to assert Japanese control over one of the country’s most important companies, according to people familiar with the matter. That has led to fears on the French side that Ghosn’s arrest may have been orchestrated in what amounts to a coup, a charge Saikawa has denied.

Renault’s 43.4 percent Nissan stake ensures an effective voting majority at shareholder meetings, while Nissan’s reciprocal 15 percent Renault holding carries no voting rights. The pact gives more weight to Paris than to Tokyo, a long-running source of frustration for the Japanese.

The French government owns 15 percent of Renault and wants to maintain the ownership structure.

Diplomatic spat

Ghosn’s detention has left the alliance without its leader and main interlocutor with the French government. Renault is considered a company of  “vital importance” to France by the state secretariat for national security.

The Macron-Abe talks came as a diplomatic spat was brewing over comments by French Finance Minister Bruno Le Maire, who said that his Japanese counterpart Hiroshige Seko had agreed in earlier talks that the cross-shareholdings should be left unchanged. Seko denied any such agreement through a rare official letter of protest sent to Le Maire, Japanese daily newspaper Mainichi Shimbun reported.

Officials at both of the ministries declined to comment on the letter or the incident.

Le Maire also came in for criticism from Renault staff representatives concerned for the alliance. “The government should know their place and stay there,” said a union official at Renault. “This kind of overreaching may be counter-productive.”

Macron challenges

Ghosn’s arrest adds to challenges facing Macron at home. Renault employs almost 50,000 people in France, making it a key part of Macron’s effort to revive his country as an economic power.

Neither Renault, nor Macron’s government, had any idea that Ghosn was about to be taken into custody last week, two officials with knowledge of the matter said earlier.

As economy minister, Macron masterminded the French government’s surprise increase to its Renault stake in 2015, raising concern within Nissan that the Elysee sought to wield more influence over the Japanese company.

Renault, Nissan and Mitsubishi “emphatically reiterated” their commitment to the alliance on Thursday after executives met in Amsterdam for the first time since Ghosn’s arrest. A review of the capital structure was not discussed at the meeting, Mitsubishi CEO Osamu Masuko said.

Bloomberg contributed to this report

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