Renault-Nissan executives meet in a climate of tension following the departure of Ghosn

PARIS / BEIJING (Reuters) – Renault-Nissan (RENA.PA) (7201.T) Leaders will this week attempt to protect joint operations from an imminent power struggle between automakers, following the shocked arrest of alliance leader Carlos Ghosn following accusations of misconduct .

The leaders of the two manufacturers and the third partner, Mitsubishi, will attend the weekly operations committee meetings in Amsterdam, scheduled before Ghosn's 19 November detention in Japan, the two companies confirmed.

"There is no change in our alliance relationship," said a spokesman for Mitsubishi.

While Nissan and the owner of Renault, at 43.4%, have promised to preserve this partnership, the general manager of the Japanese automaker Hiroto Saikawa also said that he wanted to end the control of the alliance by its French parent company, quickly taking the decision to overthrow Ghosn as president.

Ghosn, 64, and the alleged co-conspirator, Greg Kelly, have also denied allegations that they have under-reported compensation for Ghosn, falsely presented Nissan's investments and used the company's funds for personal gain. , reported the Japanese broadcaster NHK.

Renault refrained from sending Mr. Ghosn back to the position of President and Chief Executive Officer, while demanding that Nissan share the findings of the internal investigation that lasted several months and led to his arrest. The functions of Ghosn were delegated to Thierry Bollore, second in command, and to Philippe Lagayette, director.

LAW CONFLICT

Behind the scenes, fundamental differences have emerged around Renault's rights under the alliance's alliance agreement (RAMA), sources close to the case said.

Nissan, the main sales partner, has also relaunched its ambition to force Renault to cede its participation in control.

On the eve of Ghosn's ouster of Nissan on November 22, Renault informed Saikawa and its board colleagues of its intention to appoint a fourth director under the founding pact of 2002, had already reported Reuters.

In its official response, the Nissan CEO insisted that Renault was not allowed to make new appointments. The French company currently has three members of Nissan's board of directors, including Ghosn, whose mandate can only be revoked by a meeting of shareholders.

The number of Renault executives on Nissan's executive committee could even be reduced, a company official told Reuters. "The discussions could include the opportunity to let Renault keep both positions," he said.

The French government, Renault's largest shareholder, weighed in on Sunday. Finance Minister Bruno Le Maire said he was still waiting for evidence of wrongdoing by Ghosn, adding that a new audit would be done at Renault.

Ongoing efforts to secure and deepen the Renault-Nissan alliance must "respect cross-shareholdings as they are today," the minister told BFM TV. Nissan currently holds a reciprocal 15% non-voting interest in Renault.

INVESTOR PRESSURE

Saikawa's struggle for independence has already attracted the support of investors eager to unlock the discounted value of Renault's significant stake in its Japanese subsidiary.

"Relations between Nissan and Renault need to be rebalanced," said Sunday's Evercore analyst Arndt Ellinghorst. "We urge Renault to divest its stake in Nissan … about 25% (and) use the proceeds of the sale to buy back its own shares."

At the Nissan board meeting held on Thursday, appointed members at Renault also decided to eliminate Ghosn. They have done so after reviewing 400 pages of internal results, sources said, but are not allowed to share this information, even with the French manufacturer.

The Amsterdam rally should allow Bolloré and Saikawa to meet face to face for the first time since the arrest of Ghosn, sources close to the companies said.

"These are purely operational sessions," said a Renault official.

The three builders emphasized that operations and alliances were proceeding normally. Nissan, however, canceled the launch of a high-performance Leaf electric car, canceling the November 28 events in Yokohama and Amsterdam.

A spokesman for Nissan gave no reason for this postponement and said that the company had not yet set a new date for this announcement.