Renault warns Nissan it will block governance reshuffle

French carmaker Renault has warned its alliance partner Nissan that it will block the Japanese auto firm’s plan to overhaul its governance structure, Nissan confirmed Monday, a move it called “regrettable.” In a statement, the Japanese firm said it had received a letter from Renault “indicating intention to abstain from voting”, a move that would mean the proposed changes fall short of the two-thirds majority needed to pass.

“Nissan finds Renault’s stance on this matter most regrettable, as such a stance runs counter to the company’s efforts to improve its corporate governance,” CEO Hiroto Saikawa said in a statement.

Renault’s decision, first reported by the Financial Times, was taken over fears the proposed governance changes could reduce its influence, the paper said.

The move by Renault, which is Nissan’s largest shareholder, is likely to further strain ties between the two firms after the shock arrest of former boss Carlos Ghosn.

A spokesman for Renault contacted by AFP had no comment.

Renault is pushing for a full merger between the pair, but there is deep scepticism of the plan at Nissan.

Last month, Fiat Chrysler stunned the auto world by proposing a merger with Renault that would—together with Renault’s Japanese partners Nissan and Mitsubishi Motors—create a car giant spanning the globe.

But the deal collapsed suddenly on Thursday, with the Italian-US carmaker FCA saying negotiations had become “unreasonable” due to political resistance in Paris.

Relations between Renault and Nissan have been tested over the arrest in November of their joint boss Ghosn, who awaits trial in Japan on charges of financial misconduct.

Nissan has said the alleged misconduct was the result of governance failings inside the firm, and that the proposed overhauls are necessary to ensure wrongdoing is not possible in the future