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UPDATE 2-Renault board to consider next move in French power struggle
November 3, 2015 / 5:31 PM / 2 years ago

UPDATE 2-Renault board to consider next move in French power struggle

(Adds day of board meeting in 2nd paragraph)

By Laurence Frost and Gilles Guillaume

PARIS, Nov 3 (Reuters) - Renault has called an emergency meeting of its board to discuss a mounting power struggle with the French government over the future of its alliance with Nissan, government and company sources said on Tuesday.

The French carmaker’s board will meet on Friday, the sources said, amid an increasingly open conflict between Renault-Nissan Chief Executive Carlos Ghosn and Economy Minister Emmanuel Macron, triggered by the government’s surprise move in April to raise its Renault stake and secure double voting rights.

A Renault-Nissan alliance spokeswoman declined to comment on the board meeting or its agenda. Spokeswomen for the French government also declined to comment.

By temporarily raising its Renault stake from 15 percent to 19.7 percent, France was able to block Ghosn’s proposed opt-out from a law granting double votes to long-term investors.

That will permanently increase its voting clout when the law enters force next April - causing consternation among managers and staff at Nissan, Renault’s 43.4 percent-owned partner.

“This is a big issue, and from Nissan’s stance this is a concern,” Nissan second-in-command Hiroto Saikawa told reporters on Monday in his first public comment on the escalating crisis.

Under Ghosn, who heads both companies, the Japanese carmaker has been given a large degree of autonomy from Renault while outgrowing its parent to account for two thirds of combined vehicle sales and a bigger share of profit. But Nissan’s reciprocal 15 percent Renault stake carries no voting rights.

Nissan has responded to Macron’s move by drawing up proposals to end Renault’s control by acquiring a bigger stake in the French company, in a document authored by Saikawa and reported by Reuters last week.

According to the note, which was passed to French officials, Nissan’s next step would be to make a request to the Renault board to amend the founding alliance agreement in order to allow Nissan to acquire more Renault shares.

Speaking to reporters on Tuesday, Macron recalled Renault’s effective rescue of Nissan in 1999 and showed no sign of backing away from his determination to wield more clout at Renault under France’s so-called Florange law.

“When Nissan was doing badly Renault took risks investing cash to support the company, foregoing investments it could have made on its own behalf,” Macron said.

“We have been Renault shareholders since 1945, which you might say is pretty long-term, and we therefore have a legitimate entitlement to double voting rights.” (Additional reporting by Yann Le Guernigou in Paris, Naomi Tajitsu in Tokyo and Norihiko Shirouzu in Beijing; Editing by Greg Mahlich, Adrian Croft)

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