A conflict of interest has surfaced between Nissan's major shareholder, France's Renault, and its main creditor bank, Mizuho, amid the Japanese automaker's financial difficulties. This tension became evident when a proposal to reappoint Mizuho-affiliated outside director Motoo Nagai was unexpectedly rejected at Nissan's recent shareholder meeting.
According to the Nihon Keizai Shimbun (Nikkei) and Asahi Shimbun, Nissan held its regular shareholder meeting on June 23 at its headquarters in Yokohama, where it voted on the appointments of 12 directors, including President Ivan Espinosa. Only the reappointment of Nagai, a former vice president at Mizuho Trust Bank, was voted down. It is highly unusual for a proposed outside director to be rejected at a shareholder meeting in Japan.
The situation arose due to Mizuho's increasing influence. Mizuho has been the main creditor for Nissan, which has repeatedly sought funding. At this meeting, Nissan attempted to add another Mizuho-affiliated candidate, Junichi Shinbo, to the board alongside Nagai. Concerns were raised by governance experts that increasing the number of creditor representatives on the board could lead to decisions favoring the creditors, as reported by Nikkei.
U.S. proxy advisory firms Glass Lewis and ISS also recommended against Nagai's reappointment, citing concerns over independence for a long-serving outside director from a primary banking relationship. Renault, which holds 15% of the voting rights, further solidified this trend by announcing it would abstain from voting on both Nagai's and Shinbo's appointments. An abstention in a vote requiring a majority effectively acts as a no vote.
Renault's decision to take a stand is significant. Once holding a 43% stake in Nissan, Renault has historically aligned closely with Nissan's management. However, in recent years, it has reduced its stake to 15%, loosening the alliance. The alliance agreement established in 2002 included a clause requiring Renault to support Nissan's director nominations, but this was lifted in a revision in November 2023. This change has allowed Renault to express its shareholder interests without contractual constraints. Nikkei noted that Renault likely viewed this as an opportunity to maximize its influence.
The calculations of the major shareholder and the main creditor bank differ fundamentally. Mizuho seeks financial stability and debt recovery, especially as Nissan faces significant bond repayments after 2027 and is expected to skip dividends for the third consecutive year. In contrast, Renault is focused on stock prices, dividends, and equity value. Currently, Nissan's stock price has fallen to around 300 yen, half of its value at the end of 2019. Nikkei reported that Renault has been gradually selling off its Nissan shares, making its pursuit of shareholder interests more apparent. Naoki Tejima, a professor at Otaru University of Commerce, told Nikkei, "The mindset of an investor looking to take risks for higher returns is completely opposite to that of a bank seeking stable returns of principal."
According to Asahi Shimbun, 660 shareholders attended the meeting, where one shareholder voiced opposition to appointing someone with questionable independence from Mizuho as a director. This clash between the two factions is not new; previously, when Mizuho pushed for a merger between Nissan and Honda, Renault sided with shareholder value. The merger discussions, which began in December 2024, collapsed within two months, with Nikkei reporting that Renault demanded maximization of Nissan's stock value at that time. Since then, both companies have shifted their focus to project-based collaborations in North America and software. However, Nikkei noted that Mizuho may be looking for opportunities to revive discussions on capital alliances between Nissan and Honda, and the rejection of Mizuho's candidate could impact this plan.
Following the shareholder meeting, Shoji Akiyoshi, chairman of Asahi Group Holdings, was appointed as the chair of Nissan's board. President Espinosa stated, "We have made significant progress despite the ongoing uncertain environment," and announced plans to unveil a new mid-term management plan in the latter half of the year. However, the new management team will have to navigate not only restructuring but also the newly surfaced conflict between the major shareholder and the main creditor bank.
* This article has been translated by AI.
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