The French government, which is headed by the ruling Socialist Party, has raised its shareholding in Renault from 15 percent to 19.5 becoming the the car makers largest investor.
France is currently headed by the ruling Socialist Party, which in polite parlance is a washed down version of communism. The party’s leader and President of France, Francios Hollande, introduced legislation that allowed long term shareholders a doubling of voting rights.
French companies are also allowed to opt out by a two thirds majority, however the French government is seeking to counter Renault’s desire to end the one share, one vote system at a shareholders meeting on April 30th.
The intervention by the French government is seen as a public disapproval of Renault CEO Carlos Ghosn and risks destabilizing the Renault-Nissan alliance.
The government believes by making such a move it will help protect and support the worker and also improve the long term sustainability of Renault.
However the government’s increased share holding is seen as a temporary measure and will reduce its 19.7% stake back down to 15% after the shareholder gathering later this month.
Analysts believe that such a protective measure and intervention actually has the opposite effect to what is intended. However Renault’s share prices changed little on the stock markets.
Renault retains 43.5 percent of its capital shares while its partner Nissan has 15 percent stake in Renault but holds no voting rights.