Nissan CEO Says Board Majority Rejected Renault Request for Shareholder Meeting

By Sam Schechner

Nissan Motor Co. Chief Executive Hiroto Saikawa said a majority of Nissan's board supported the company's refusal to call a snap shareholder meeting in response to the indictment of former Chairman Carlos Ghosn on charges of financial misconduct.

Mr. Saikawa described the board's decision in a letter dated Dec. 17 to Thierry Bolloré, deputy CEO of Renault SA, which owns 43% of Nissan. Three days earlier, Mr. Bolloré had written to Mr. Saikawa to request a shareholder meeting as soon as possible.

Mr. Saikawa's response, which was reviewed by The Wall Street Journal, says that a majority of the board wanted to take several months to weigh ways to improve Nissan's governance before holding its regularly scheduled board meeting, which typically falls in June.

The letter from Nissan underscores tensions between Renault and Nissan, whose two-decade alliance was rattled by Mr. Ghosn's arrest in Tokyo last month. Mr. Ghosn was chairman of Nissan until he was stripped of that post after his arrest. He remains Renault's chief executive, though Mr. Bolloré is running the company while Mr. Ghosn remains in Japanese custody.

Spokesmen for Nissan and Renault didn't immediately respond to requests for comment.

A person close to Renault said that it was notable that Nissan's nine-member board wasn't unanimous in rejecting Renault's request for a meeting, given that that two of its members are still in Japanese custody, Mr. Ghosn, and a top aide, Greg Kelly. The person added that it was unwise to wait until June to determine the governance of Nissan, given tough competition in the automotive business.

In Mr. Saikawa's Dec. 17 letter, he said Nissan's board had decided that a committee -- consisting of Nissan's three independent directors as well as four outside members including a former judge -- should issue its recommendations on how to reform the company's governance before the company's shareholders meet. The committee aims to submit its recommendations at the end of March.

Holding a meeting before the committee makes its recommendations "would be viewed as presumptuous by the Japanese public and regulators," Mr. Saikawa wrote, adding that a "premature shareholders meeting would not be in the interest of all shareholders of Nissan."

In the Dec. 14 letter asking for the meeting, Mr. Bolloré had said such a meeting was needed because Nissan's "indictment creates significant risks to Renault, as Nissan's largest shareholder, and to the stability of our industrial alliance."

Mr. Ghosn was indicted on Dec. 10, alongside Nissan itself, on charges of understating his compensation in corporate filings by around $44 million over a five-year period ended March 2015. Prosecutors said they also suspected Mr. Ghosn of understating his compensation in the three years ended March 2018, with the total suspected understatement for the eight years coming to more than $80 million.

A person familiar with Mr. Ghosn's legal defense has said Mr. Ghosn maintains his innocence of the charges. Nissan, in response to its indictment, has apologized for what it called "false disclosures" and said it would improve its governance.

(END) Dow Jones Newswires

December 23, 2018 16:14 ET (21:14 GMT)

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