Business / Corporate

Nissan fails at board meeting to name new chairman to succeed Carlos Ghosn

Kyodo, Reuters

The board of Nissan Motor Co. put off a decision to choose the successor to ousted Chairman Carlos Ghosn, who has been arrested for alleged financial misconduct, reflecting heightened tensions with its partner Renault SA.

Renault has urged Nissan to hold an extraordinary shareholders meeting to discuss the French automaker’s representation in the Japanese firm. But Nissan has rejected the call, a source close to the matter said, while CEO Hiroto Saikawa emphasized the need for beefing up its governance before seeking investors’ understanding.

Renault has retained Ghosn as its chairman and CEO. The French government, Renault’s biggest shareholder, is backing Michelin CEO Jean-Dominique Senard to replace Ghosn permanently as Renault’s chairman, Le Figaro newspaper reported.

Ghosn was indicted last week in Japan along with his close aide Greg Kelly on a charge of violating the financial instruments law by understating his remuneration in the company’s reports. They have denied the allegation.

“There’s no need to be in a hurry to select the (new) chairman,” Saikawa said at a news conference following Monday’s board meeting at Nissan’s headquarters in Yokohama.

He said the board will await discussions by a newly established internal committee on improving corporate governance, which is expected to make proposals in March.

“We’ll take the next course of action based on the (committee) discussions,” Saikawa said.

The seven-member committee, comprised of third-party experts on governance and three independent directors from Nissan, will discuss the composition of the automaker’s board members, among other issues, Saikawa said.

He also said the best timing for holding a shareholders meeting is after receiving proposals from the committee.

Renault, the largest shareholder in Nissan with a 43.4 percent stake, appears to be stepping up efforts to retain its influence over its partner, particularly during the process of selecting the new board.

The online edition of The Wall Street Journal reported Sunday that Thierry Bollore, deputy CEO of Renault, sent a letter dated Dec. 14 to Saikawa urging him to promptly call an extraordinary shareholders meeting to discuss Renault’s representation on Nissan’s nine-member board and within the ranks of its top managers.

Nissan initially planned to appoint a new chairman at the Monday meeting, and tapping Saikawa as interim chairman was one option.

A panel of Nissan’s three independent directors — former industry ministry official Masakazu Toyoda, racing driver Keiko Ihara and Jean-Baptiste Duzan, a former Renault executive — will remain tasked with selecting nominees for Ghosn’s successor as chairman among the board members.

As part of the latest finding, sources close to the matter said Tuesday a contract document written in English and signed by Ghosn outlining his remuneration, including his deferred post-retirement pay, described his total compensation as “determined.”

Ghosn, who was indicted over alleged understatement of remunerations in securities reports presented to regulators, has admitted to prosecutors that his pay was not entirely stated in the reports but claims he had no obligation to do so as the amount of his pay after retirement had not been settled, the sources said.

Critics have said that Ghosn, who is credited with rescuing Nissan from near-bankruptcy in the 1990s, was allowed to have extensive powers and make decisions at his own discretion over company management.

Nissan apparently hopes to reduce the influence of Renault on its management and review the alliance to make it more equitable.

Nissan holds a 15 percent stake in its French peer but without voting rights and 34 percent in Mitsubishi Motors Corp., the third partner in the alliance.

A current agreement between Nissan and Renault says the Japanese automaker is to receive senior executives from its French peer, although that does not include the post of chairman, sources close to the matter have said.

Renault last week retained Ghosn in his position as chairman and CEO of the firm, saying no evidence of wrongdoing had been found in an internal probe, in contrast to Nissan’s quick move to strip him of the role of chairman following his arrest on Nov. 19.

Also Monday, Mitsubishi Motors, which has also dismissed Ghosn as chairman after his arrest, decided at its board meeting to set up a committee comprised mainly of independent directors to ensure the transparency of decisions on nominations and remunerations of directors and executives.

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