Nissan says Saikawa retained as CEO, putting focus on Renault ties

Nissan says Saikawa retained as CEO, putting focus on Renault ties

TOKYO (Reuters) – Nissan Motor Co said on Friday that Hiroto Saikawa would stay on as chief executive, backing the protege of former boss Carlos Ghosn even as top shareholder Renault pushed for a change in the Japanese automaker’s leadership.

FILE PHOTO: Nissan CEO Hiroto Saikawa attends a news conference in Yokohama, Japan, May 14, 2019. REUTERS/Kim Kyung-Hoon -/File Photo

Saikawa’s re-appointment is likely to be seen as a rebuff to Renault, which has been pushing for leadership change at Nissan as a prelude to merger talks, sources at both companies have told Reuters. Saikawa – who has long opposed full integration – is seen as an obstacle to a tie-up, several people have told Reuters.

Nissan’s lackluster performance in the months since the dramatic ouster of Ghosn, following his arrest on charges of financial misconduct, has sparked concern at Renault.

Analysts estimate that Nissan’s planned 30% dividend cut this year will wipe around 130 million euros ($145 million) off Renault’s earnings.

Nissan also said that Renault Chief Executive Thierry Bollore will join its board, while Renault Chairman Jean-Dominique Senard will remain on the board.

The appointments will be presented for approval at a shareholder meeting in June.

There had been widespread speculation about Saikawa’s future and the make-up of the board after Nissan this week flagged a 28% drop in annual profit and slashed the dividend, underscoring its struggle to turn the page after Ghosn.

Nissan will also increase the number of board seats to 11 from eight, it said, seven of which will be outside directors.

The make-up of Nissan’s board has vast implications for the Nissan-Renault alliance. The unequal relationship between them – smaller Renault has the bigger stake in Nissan – has long been a source of friction.

Ghosn’s November arrest in Japan and immediate ouster by Nissan strained the partnership, as Renault resisted a full investigation of alliance finances and kept its absent leader in office as chairman and CEO for two more months.

Ghosn, who denies any wrongdoing, is out on bail and awaiting trial in Tokyo on charges of financial misconduct and allegedly enriching himself at Nissan’s expense.

Nissan’s shares were little changed, underperforming a 1.5% rise in the Nikkei share average.

Reporting by Maki Shiraki and Naomi Tajitsu; Writing by David Dolan; Editing by Himani Sarkar

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