Nissan, Renault discuss future as Ghosn tries to regain clout

Automakers planning to form a single board for the alliance that will oversee its governance and operations

by BLOOMBERG

TOKYO • Carlos Ghosn (picture) sought and failed to join a board meeting at Nissan Motor Co Ltd that could change the course of its three-way alliance with Renault SA and Mitsubishi Motors Corp.

The automakers are planning to form a single board for the alliance that will oversee its governance and operations, Renault said in a statement yesterday, confirming earlier media reports.

As architect of the structure and former chairman of all three companies, Ghosn was seeking to join Nissan’s meeting today to explain himself personally to fellow directors.

But the Tokyo District Court rejected his request, saying it would violate terms of his bail forbidding him from contacting people involved in the charges against him for allegedly falsifying financial records and breach of trust.

Given the extent to which the alliance is working to overhaul its structure without Ghosn, his presence wouldn’t have made much of a difference, said Janet Lewis, an analyst for Macquarie Capital Securities (Japan) Ltd in Tokyo.

“I don’t see how turning up at Nissan’s board meeting is going to change anything,” Lewis said. “The alliance is working on how to improve its governance and how the new Renault leadership team can best work with Nissan and Mitsubishi. The Ghosn court case is a sideshow that should not impact the future direction of the alliance.”

At today’s meeting, Nissan’s directors will discuss replacing two separate Amsterdam-based alliance entities, Renault-Nissan BV and Nissan-Mitsubishi BV, people familiar with the matter said, asking not to be identified because the information isn’t public.

The new plan for the alliance is aimed at fostering more balanced decision-making represented by Renault chairman Jean-Dominique Senard, Nissan CEO Hiroto Saikawa and Mitsubishi Motors CEO Osamu Masuko.

Senard will probably chair the new committee, one of the people said.

Spokesmen for Nissan and Mitsubishi declined to comment on the reported new structure. The three companies have scheduled a joint press conference at Nissan’s headquarters in Yokohama today.

The current organisation for the alliance is considered outdated and obscure in its functions, with the carmakers’ own investigations having found that Ghosn funnelled money from the Dutch units. Ghosn has said the claims of improper payments were a “distortion of reality”.

With the start of Ghosn’s trial still months away and the drama of his sensational release from jail last week subsiding, focus is shifting back to the fate of Nissan and how the auto executive will deploy his hardwon freedom, even if under strict bail terms.

As Nissan’s CEO, Ghosn actively engaged with the press and probably will seek to make the case for his innocence in interviews and possibly a news conference as soon as this week. He already gave several jailhouse interviews to Japanese and French media.

Ghosn has kept a low profile since exiting a Tokyo detention centre on March 6 disguised as a construction worker. Japan’s media reported on Ghosn sightings around Tokyo, but he has yet to give an interview or speak directly to the press since his release. Instead, he’s relying on an “All-Star” team of lawyers to communicate with the public as they prepare his defense.

Junichiro Hironaka, Ghosn’s lead attorney, said the car titan agreed to “severe” bail conditions — including staying in Japan, paying ¥1 billion (RM36.8 million), in bail having cameras installed at the entrance and exit of his home, restrictions to using his mobile phone and having no access to the Internet.

Ghosn, as well as Greg Kelly, another Nissan executive arrested in the case, aren’t allowed to contact those involved with the investigations at Nissan, Renault and other entities.

Although Ghosn was stripped of his titles, he remains a director at Nissan and Renault. A meeting of Nissan shareholders set for April 8 will vote on whether to remove him from the board.

The bigger question is whether a planned merger between Nissan, Renault and Mitsubishi will happen. Although Nissan is said to have sought a review of the pact’s lopsided power structure that favoured Renault, the two have pledged their allegiance to each other with plans to extend a two-decade accord.

“Now that Ghosn’s influential leadership is gone, there’s a risk that each party will become more sharply focused on their self-interests,” said Tatsuo Yoshida, an analyst at Sawakami Asset Management. “They need to have a structure where decisions are made transparently.” — Bloomberg