Japan-France Diplomatic Spat Over Nissan-Renault Control?

The initial discord and displeasure surrounding the imbalance of power between Nissan and Renault in their alliance is taking a turn for a diplomatic feud between the countries.

Following the arrest of the leader if both the companies and the architect of the alliance Carlos Ghosn in Japan on charges of financial misconduct, the biggest ever test is being faced by the 19-year partnership between Renault and Nissan.

Ghosn (64) was arrested by Japanese authorities in Tokyo on November 19 and has been under arrest since, According to media reports, the prosecutors are expected to ask for a 10 day extension of his custody. .

But in order to keep Ghosn under further custody in case the appeal extension for his custody is allowed by the Japanese court, the prosecutors would have until December 10 to file charges against him or re arrest him under some other charge.

But in the absence of a second rank of leaders, there is virtually no leader of the alliance between the Japanese and French car markers following the arrest of Ghosn. On the other hand, the French government has said that it intends to maintain the current alliance and company capital structure.

Nissan is actually controlled by Renault because the French car maker owns 43 per cent stake in the Japanese company while just 15 per cent non-voting stake is owned in Renault by Nissan.

The support of both the French and the Japanese government for the alliance was reaffirmed by them following a meeting between the Japanese industry minister Hiroshige Seko and French finance and economy minister Bruno Le Maire in Paris last week.

But there was confusion after a statement by a few days later by Le Maire said during a television interview in France where he said that the two ministers had agreed to maintain the current capital; structure of both the companies. This statement was denied by his Japanese counterpart.

According to a news report published in the Mainichi Shimbun daily, a rare letter of protest had been sent to Le Maire over his latest remarks by Seko. However there were no comments available from Japan’s Ministry of Economy, Trade and Industry.

Ever since the arrest of Ghosn, there have been renewed attempts at Nissan to make changes to what it believes to be over sized and disbalanced power for controlling the Japanese car maker by Renault. This has apparently created a discord at the even at the diplomatic level of the two countries – France and Japan.

In 2015, when the current French President Emmanuel Macron was the economy minister of the country, he had engineered an increase of the French government’s stake in Renault stake which had raised concerns within Nissan – concerned over possibilities of greater French government control over Nissan.

Executive of the two companies – along with those from the third partner of the alliance Mitsubishi, had met recently and had “emphatically reiterated” their pledge to the partnership on Thursday.

Mitsubishi Motors’ CEO Osamu Masuko said that the meeting did not discuss anything about reviewing of the capital structure.

(Adapted from IrishTimes.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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