Nissan Board Gets Shareholder Approval To Address Surveillance Claims

The shareholders of Nissan have re-elected the chief executive and other nominees of the board at an annual meeting that happened this week. The shareholders’ decision comes amid reports of an internal conflict among senior management and claims of corporate surveillance.

Nissan gets shareholder approval to address surveillance claims

Nissan is currently conducting a probe into CEO Makoto Uchida and surveillance on his deputy Ashwani Gupta. These allegations mirror the conflict that led to the departure of the former head, Carlos Ghosn. The conflict could also distract the management from making necessary changes for the company’s turnaround.

The recent shareholder meeting was the first held since a new deal was achieved with French carmaker Renault. The negotiations heightened tensions between Uchida and Gupta. While Uchida promoted this deal, Gupta had some reservations.

The surveillance charges were highlighted in a letter sent to independent directors by a senior adviser at Nissan. These accusations will be addressed by the new board, and the recent shareholder meeting did not raise an issue with the claims.

The deputy head of research at the CLSA brokerage company said that the negotiations of the Renault alliance had an impact on management. The management has become less focused on the car business.

Nissan and Renault have not finalized the terms of this deal that was announced earlier this year. Under the deal, Nissan will have a 15% stake in Renault’s electric vehicle division. Renault will also reduce the 43% stake it has in Nissan.

The friction at the top management can already be seen. Gupta, who previously served as the Chief Operating Officer, attended this week’s shareholders meeting, but in May, the company had reported that he would not receive another term on the board. The company announced Gupta’s ouster last week.

During a recent shareholders meeting, a shareholder asked about Gupta’s time at Nissan. Uchida noted that the executive had played a significant role in projects. He had also started creating a mid-term plan.

Nissan is yet to name its new COO, who will replace Gupta. The automaker recently announced the executive line-up, with some key positions remaining unchanged. The meeting has also demonstrated the concerns that the shareholders have regarding Nissan’s share price.

Investors raise concern over Nissan’s share price

Nissan’s shares have been on a downtrend, prompting Uchida to apologize for the poor performance. The company’s shares have made a 1.4% return, including dividends, compared to the 25% benchmark Nikkei 225 index.

The support that has been received from shareholders over the ten board nominees was largely expected. The top management has also received immense support from individual investors in Japan.

During the recent meeting, the shareholders turned down a proposal tabled by an individual investor seeking higher dividends during the current financial year. The meeting was restricted solely to shareholders. Investors are now eagerly waiting to see whether the management will rise up from the internal conflict and focus on boosting performance to increase the share value.