Nissan Motor Co. agreed with Mitsubishi Motors Corp. in September 2019 to join forces under a new company controlled by major trading company Mitsubishi Corp. to escape the influence of its top shareholder Renault SA, sources familiar with the negotiations said Saturday.

The plan would have seen Mitsubishi acquire up to 22 percent of Renault's 43 percent stake in Nissan, but things came to an abrupt halt following the resignation of Nissan's president at the time over the receipt of overpaid executive bonuses, according to the sources including a former Nissan executive involved in the negotiations.

Combined photo shows the logos of (from L) Nissan Motor Co., Mitsubishi Motors Corp. and Renault SA. (Kyodo)

Under the proposition, Nissan and Mitsubishi Motors would have come under the umbrella of the new firm and a proposal would have been made for a partnership with Honda Motor Co. to create an alliance rivaling Toyota Motor Corp. and other global automaker giants, they said.

Nissan entered a comprehensive tie-up with Mitsubishi Motors in 2005, with the former acquiring a 34 percent stake in the latter in 2016.

Renault was believed to have been persuaded on the grounds that the plan would expand the alliance with Nissan and Mitsubishi Motors, while selling half of its Nissan stake would have generated a large amount of cash for reinvestment, the sources said.

Under the plan, Nissan was to gain management independence and remain listed on the Tokyo bourse, they said.

In 2019, the relationship between Nissan and Renault remained rocky, as the two firms struggled to re-evaluate their capital ties after former Nissan chairman Carlos Ghosn was arrested in 2018 for alleged financial misconduct and ousted. Ghosn fled to Lebanon in 2019 while out on bail.

Renault became the top shareholder of Nissan in 1999 when the Japanese firm was on the brink of bankruptcy, sending Ghosn to lead the overhaul.

The envisioned share transaction deal was derailed about a week before it was to be made public as then Nissan President Hiroto Saikawa announced in September 2019 that he would step down to take responsibility for the discrepancies over his bonuses.

Nissan's internal investigation into Ghosn's alleged misconduct discovered in 2019 that Saikawa was overpaid under the stock appreciation rights scheme, which allowed executives to receive a bonus if the company's share price performed well.

Renault is currently considering cutting its stake in Nissan in steps to 15 percent as part of their partnership review, with an announcement expected later this month, according to people close to the negotiations.

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