Renault has told Nissan that it will block the Japanese company's plan to revise its difficult corporate governance, further fueling the strained relationship between the two alliance partners.
The decision was announced in a letter by Jean-Dominique Senard, the chairman of Renault, Hiroto Saikawa, managing director of Nissan, on Saturday – marks an abrupt reversal of politics and threatens to destroy Nissan's months of work.
Mr. Senard's letter was sent just two weeks before the annual meeting of Nissan, in which the Company had hoped to vote through a long overdue transition of auditors to a governance system of three Nomination, Compensation and Audit Committees.
According to the persons familiar with the letter, who were not published, Senard wrote that Renault, as a 43 percent shareholder of Nissan, decided to abstain and had thus denied the proposal the required two-thirds majority.
People near the Japanese automaker condemned the move as "outrageous and irresponsible."
The three-committee plan, which Mr. Senard had personally voted on several occasions in his role as a Nissan board member, was the result of months of self-examination following the arrest of Carlos Ghosn, previously Chairman and CEO of both companies.
During his tenure, Mr. Ghosn had attempted to make the automaker alliance "irreversible," angering many within Nissan, who also feared the influence of the French state within the group. Relations between the two companies have been tense for a long time, but have come under heavy pressure since Mr Ghosn left.
Mr. Senard had tried to resume the merger talks with Nissan shortly after his takeover as head of Renault, in order to stabilize the relationship. But after being rejected again, he turned to Fiat Chrysler instead. Nissan was informed only last-minute about the talks with the FCA, which further undermines the trust between the two sides.
The FCA withdrew its merger proposal after the French state, which owns 15 percent of Renault, demanded more time for the Nissan's support of a tie.
French government officials said their delay decision was partly fueled by Nissan's Renault board members who said they were abstaining rather than voting for the deal. And while Finance Minister Bruno Le Maire has publicly supported Senard, some French officials have privately assured that Nissan has backed the deal and accused the 66-year-old Renault boss of naivety.
People close to Nissan have speculated that Mr. Senard's intervention may be an attempt to leverage against his alliance partner, either expecting the FCA to return to the negotiating table, or because Senard wants to resume merger talks with Nissan.
Following the arrest of Ghosn Nissan, a special body convened to analyze governance deficiencies and propose improvements. The main recommendation was the immediate introduction of the three-committee system. The entire board of Nissan, to which Mr. Senard belonged, unanimously approved the idea on May 15.
In a letter from Saturday, Mr. Senard justified the abrupt turnaround by arguing that the three-committee system could somehow be used to reduce Renault's influence as Nissan's largest shareholder.
Persons familiar with Senard's thoughts emphasized that the letter was "one step, but only one step ahead" of the Nissan Annual General Meeting and that Renault's position could change.
The same individuals stated that Renault was anxious to maintain shareholder rights, adding that the French car maker had concerns about the future composition of the committees and how the powers of the Board of Directors would be delegated to these committees.
"Senard clearly does not want this to be understood as a declaration of war, but as the beginning of a trial," said another person close to Renault.
Nissan and Renault declined to comment.