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Let's 'forget' capital structure and move on, Renault tells Nissan

Senard calls for rebuilding trust and says Fiat Chrysler merger plans are off

Renault Chairman Jean-Dominique Senard has said he wants to focus on rebuilding trust with alliance partner Nissan.   © Reuters

TOKYO -- Renault Chairman Jean-Dominique Senard said he wants his company and Nissan Motor to "forget" about their unequal cross-shareholdings and focus instead on day-to-day operations and rebuilding trust.

Renault is the biggest shareholder in Nissan, with a 43.4% stake, while Nissan holds just 15% in its French partner, an arrangement Senard acknowledged is "sensitive." The relationship between the two companies has often been strained since the arrest of Carlos Ghosn, the former chairman of the two companies, last November. Ghosn's arrest came as he was preparing to formally propose a merger to Nissan CEO Hiroto Saikawa.

"The best thing I have tried to do is to create a governance body that does not take into account this shareholding and that people forget the situation as it is and it does not become the subject of the day," Senard said in a group interview with Japanese media in Tokyo on Wednesday.

"My only goal is to make sure that the situation does not impair the good relationship in operation bases. Don't translate that me saying [the current capital structure] needs to be changed. It is too sensitive," he said. "It is not something you can deal with in one night, you need time. It is not the subject that must stop us from working," he added.

Senard led the creation of a consensus-based operational management board to run the alliance of Renault, Nissan and Mitsubishi Motors under his chairmanship. "Nobody is talking about shareholding at the board ... I created that board to avoid discussing these issues in day-to-day life," he said.

Earlier this month, French finance minister Bruno Le Maire told the Nikkei Asian Review that Paris would be "open" to Renault reducing its stake in Nissan if it would lead to "better governance." Paris owns 15% of Renault.

As for the now-collapsed merger plan with Fiat Chrysler Automobiles, Senard said that idea is no longer being pursued. "It was a good project, but don't translate that into me saying that the project is still going. It is not, I have to be very clear it is not."

Senard also said Nissan and Renault need to show "mutual respect," emphasizing that this meant from the Japanese automaker as well. "It is always seen as unilateral and it should not be," he said, raising as an example Nissan's attempt to avoid having multiple directors from Renault sit on newly made governance committees. Those committees were approved as part of a governance reform plan at Nissan's annual general meeting on Tuesday.

That meeting was a times heated, with some Nissan shareholders shouting that Senard was betraying the Japanese automaker. Senard joined the Nissan board in April.

He opposed the corporate governance reforms that Nissan had initially proposed, which reportedly included only Senard on the new governance committees. He dropped his opposition after the Japanese carmaker agreed to give Renault CEO Thierry Bollore a place on one of the committees.

The plan calls for setting up nomination, remuneration and audit committees composed mostly of outside directors, a move intended to prevent the concentration of power in the hands of a single executive, as was the case under Ghosn.

"I thought it was very fair and simple. Why should we not be able to sit at committees of the board [of Nissan] the same way as the Nissan people sit in Renault board without any question?" he said. Nissan has two seats on Renault's board and its committees, including one on its strategy committee. "I think it is just common sense ... Who is aggressing who?"

Senard also said the merger plan Renault proposed to Nissan in April was "there before me, and there is nothing exceptional about it," adding that "all companies in the world look at these options."

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