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By Naomi Tajitsu and Laurence Frost
TOKYO/PARIS (Reuters) - The two-decade-old partnership of Renault SA and Nissan Motor Co was plunged into fresh crisis on Monday, as the French automaker's demand for a greater say in Nissan's new governance system drew rare public censure by the Japanese firm.
Renault, which owns 43.4% of the Japanese firm, signaled it would block Nissan from formally adopting an overhauled governance structure at a June 25 shareholder meeting - unless Renault received representation on new Nissan committees.
The demand, conveyed in a letter from Renault Chairman Jean-Dominique Senard just weeks before the meeting, could scuttle the new structure, created after months of deliberation by an outside committee and previously supported by Senard. Nissan responded in some of its frankest language yet against its top shareholder, calling the demand "most regrettable".
"Nissan has received a letter from Renault indicating intention to abstain from voting," Nissan said in a statement.
"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."
The rift lays bare the deep strain between the two automakers, whose alliance has been under pressure since the arrest of former Chairman Carlos Ghosn in November. What's at stake now may be even bigger than their vast alliance, which includes Mitsubishi Motors.
Renault and Fiat Chrysler Automobiles (FCA) are looking for ways to resuscitate their collapsed merger plan and secure Nissan's approval for that deal, Reuters reported on Monday. Nissan is, therefore, poised to urge Renault to significantly cut the 43.4% stake, two people told Reuters.
By abstaining from the governance vote, Renault would effectively block the new governance system - which includes three committees - as adoption requires two-thirds approval. Nissan recently said it would abstain from voting on the FCA-Renault merger, although both FCA and Renault later blamed the failure of that deal squarely on the French government.
"Renault's rights as 43.4% shareholder of Nissan need to be fully recognized and, at a minimum, one or two directors proposed by Renault should be members of each of the three committees," Renault said in its letter, a copy of which was viewed by Reuters.
"As currently proposed, this does not seem to be the case."
CONFLICT OF INTEREST?
A Renault source said Senard's letter was motivated by concern about Renault's under-representation on the new Nissan board committees being introduced following the arrest of Ghosn, who is now awaiting trial and denies the financial misconduct charges against him.