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Nissan's Ghosn crisis

Nissan rejects Renault proposal of shareholders meeting

Choice of Ghosn successor delayed as partners lock horns in power struggle

Nissan Motor, with its global headquarters in Yokohama seen here, formed an independent governance committee that will influence the choice of a new chairman. (photo by Maho Obata)

TOKYO -- Nissan Motor denied a request from top shareholder Renault to convene an extraordinary shareholders meeting to appoint a replacement for ousted Chairman Carlos Ghosn, a move that could intensify a power struggle over the Japanese automaker's management.

Instead, Nissan formed an independent governance committee during a board meeting held Monday, tasked with reviewing the weak governance structure at Nissan -- which allowed one figure, Ghosn, to hold overwhelming power -- and devising a process to decide executive pay.

The committee also will have extensive input on appointing Ghosn's successor.

"I believe the makeup of the board of directors will be among the proposals submitted by the committee," Nissan President and CEO Hiroto Saikawa told reporters Monday, indicating that the governance panel will shoulder the main burden of drawing up the post-Ghosn management structure.

This comes after Thierry Bollore, the deputy CEO of Renault, sent Saikawa a letter dated Friday calling for an extraordinary shareholders meeting to be held before the annual event in June. Renault was seen as using the meeting to make appointments and maintain influence over Nissan.

"A shareholder forum would be the best manner of addressing these matters in an open and transparent fashion," the letter read.

Saikawa essentially shot down the French automaker's proposal.

"The new committee is very important," he told reporters when asked whether an extraordinary meeting was on the table. "We will take into account the governance committee's recommendations as much as possible."

Nissan was unable to appoint an interim chairman at Monday's board meeting. After dismissing Ghosn as chairman at a Nov. 22 board meeting, the company was to choose an interim head from the remaining Japanese directors.

But Nissan could not come to terms with representatives from Renault, and a detailed succession plan was put on hold.

Nissan President and CEO Hiroto Saikawa said the new governance panel will submit a report by March, at which time the automaker's new chairman may be selected.   © Reuters

Ghosn was taken into custody last month on suspicion of underreporting his compensation.

"In my view, the decision [to name Ghosn's replacement] should be made in a way that is convincing, and not in a hurry. We should take plenty of time," Saikawa told reporters.

Saikawa said the committee, comprised of Nissan's three independent directors and four external experts on governance and management, will submit a proposal by March. Ghosn's successor could be chosen after the proposal is received, he said, adding that there was no fixed deadline for the appointment.

"Of course, we will listen carefully to the opinions of our partner Renault, but ultimately we are responsible for Nissan's governance," Saikawa added.

The points of contention are the rights the two companies retain under the alliance's accord. Named the "Restated Alliance Master Agreement," alliance rules stipulate that Renault picks Nissan executives at the chief operating officer level or above. However, Nissan can seat one more director over Renault on the board. Renault, meanwhile, will not oppose Nissan's board decisions authorized at shareholder meetings, including executive appointments.

Renault considers it its right to name top executives. Nissan points to the clause regarding Renault's noninterference over Nissan board-meeting decisions to maintain independence.

This sets the stage for Renault to heighten its offensive against Nissan. Japanese law gives shareholders, who have retained at least 3% voting rights for more than six months, the right to demand that a company convene a shareholders meeting. Renault's roughly 44% voting stake in Nissan gives it ample room to exercise that right.

If the company's board does not begin the process of convening the meeting in a timely fashion, or if it does not open the meeting within eight weeks of receiving the request, the shareholder can petition the courts to force a meeting. Depending on Renault's next move, the battle over Ghosn's succession could become a civil case.

Nikkei staff writers Wataru Suzuki and Togo Shiraishi contributed to this report.

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