Nissan Motor Co. CEO Hiroto Saikawa said Tuesday he plans to review the "unbalanced" capital structure of its alliance with Renault SA if necessary as the automaker revamped its governance structure following the arrest of former boss Carlos Ghosn.
During the annual shareholders' meeting also attended by Renault Chairman Jean-Dominique Senard, Saikawa said he will assess whether the cross-shareholdings structure, where the French automaker holds a 43.7 percent stake in Nissan, is becoming "a factor of instability" for the partnership's business operations.
The Japanese company holds only a 15 percent non-voting stake in Renault despite Nissan selling 5.65 million vehicles worldwide last year, 1.5 times more than Renault.
The remarks can be seen as a shift in stance by Saikawa, who had shown reluctance to have in-depth discussions on the shape of the alliance, saying it is "not the time" to do so and that it needed to focus on turning around its business.
Saikawa, however, said he has no intention to undermine the strength of the current alliance also grouping Mitsubishi Motors Corp. and which has become the world's second-largest auto group by volume.
The issue of a lopsided capital structure and talk of a merger between the two automakers have been a source of friction, with Renault seeking to maintain its influence over the alliance and Nissan wanting to retain its management independence.
Saikawa reiterated his stance against a merger with Renault as being "not good." But Senard, a Nissan board member, said he remains supportive of the idea.
"This idea of a merger, which has been there for months already, hasn't changed in my mind," he said, adding it is up to the Nissan board to make the final decision.
Former Chairman Ghosn is also believed to have sought a merger between the two automakers before his arrest last November for alleged financial misconduct, tipped by a plea-bargain deal between Nissan senior officials and prosecutors.
Senard also said that the talk of a merger between Renault and Fiat Chrysler Automobiles N.V., which collapsed recently in part due to Nissan withholding support, remains an "incredibly beneficial" project for the Japanese automaker and that he believes it is the "only way" to enhance the alliance.
At the meeting, shareholders approved Nissan's proposed management overhaul that features the establishment of three board committees to oversee executive remuneration, appointments and audits.
The reform is aimed at drawing a clear line between business execution and supervision, with the company saying the previous structure allowed Ghosn, who has been charged with alleged financial misconduct and breach of trust, to effectively control important matters himself.
The automaker secured the two-thirds majority required for the establishment of the committees after earning last-minute support for the proposal from Renault, which once had threatened to abstain from voting unless Senard was joined by Renault CEO Thierry Bollore on the committees.
The Yokohama-based company also won shareholders' approval for a new 11-member board, including the reappointment of Saikawa and Chief Operating Officer Yasuhiro Yamauchi from Nissan, and Senard and Bollore from Renault. The number of outside directors is to be increased to seven from three in the current eight-member board.
Nissan faces the urgent task of reviving its earnings after its group net profit plunged 57.3 percent to a nine-year low of 319.14 billion yen ($2.97 billion) in the business year to March.
The auto industry is fast shifting to electrified and self-driving vehicles that require hefty development investments and cooperation with other companies including information technology firms.
Saikawa has faced calls from some shareholders to step down for lack of oversight over Ghosn's alleged misconduct, including underreporting of remuneration in Nissan's securities reports for the eight years through March 2018 and misuse of company funds.
The Nissan CEO, who was regarded as a close lieutenant of Ghosn and appointed to the current post in April 2017, declined to step down but will "accelerate" efforts to establish a management that will succeed him.
Ghosn, credited with saving Nissan when it was teetering on the brink of bankruptcy in the late 1990s, has been stripped of his chairmanship posts at Nissan, Renault and at Mitsubishi. He has denied all of the financial misconduct allegations.
© Kyodo News International, Inc., source Newswire