Economy

French Government Open To Reducing Its Stake In Renault

French Government Open To Reducing Its Stake In Renault”

The rift exposes the deepening strain between France's Renault and Nissan, whose 20-year-old tie-up has been under pressure since the arrest of former Chairman Carlos Ghosn in November.

The tensions have burst into the open with the arrest of Ghosn on financial misconduct charges in Japan - which he and his family see as a plot by some within Nissan to prevent closer integration of the two firms.

"Nissan finds Renault's new stance on this matter most regrettable, as such a stance runs counter to the company's efforts to improve its corporate governance", it said in a statement.

The alliance between Nissan, Renault and Mitsubishi - once the most successful of its kind in the world - is in crisis after Mr Ghosn, 65, was charged with under-reporting his salary and misuse of corporate funds.

The minister said it would be up to the bosses of Renault and Nissan to decide how to push the alliance forward as ties between the two firms have been strained after Ghosn's shock arrest.

Analysts say it would be hard and costly for Nissan to break away from Renault as the companies, partnering for two decades under Ghosn's leadership, share auto parts, research and investments.

"It's not a final abstention, and Renault's position can still change", the Renault source said.

Renault had yet to receive specific details on the proposed composition of each of the committees, another source with knowledge of the issue told Reuters.

Over the weekend, Le Maire clarified his comments to Bloomberg, indicating that France isn't in a rush to proceed in this move in the near future, and that it will be done only under certain circumstances. The French government owns 15 percent in Renault. "First the alliance (between Nissan and Renault) should be consolidated and then consolidation (more generally) and not one before the other".

In March a Nissan-appointed outside team recommended the formation of the three committees to improve its corporate governance.

The proposal calls for three committees to add outside directors and oversee compensation and audit.

Renault is pushing for a full merger between the pair, but there is deep scepticism of the plan at Nissan.



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