Nissan, Ghosn, Kelly indicted over under-reported pay

11 December, 2018, 08:33 | Author: Darnell Patrick
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Tokyo prosecutors officially charged ousted Nissan Motor chairman Carlos Ghosn on Monday for under-reporting his income and extended his detention on suspicion of additional financial misconduct.

Ghosn, a veteran of the auto industry, was arrested in Tokyo last month for alleged financial misconduct.

But on Monday, prosecutors served fresh arrest warrants alleging that they continued to underreport Ghosn's income through to March this year, increasing the overall amount by 4bn yen.

Former representative director Greg Kelly was also indicted for aiding Ghosn in understating his income.

In a statement, Nissan confirmed Ghosn and Kelly had been indicted, as well as admitting it too, as a legal entity, had been indicted: "Nissan takes this situation extremely seriously".

Nissan shares fell 3 percent in Tokyo following Monday's developments.

Nissan has also blamed Ghosn for a series of infractions including personal use of company funds. It was through his role with the latter that he signed off on the French manufacturer's return to Formula 1 as a full constructor.

Nissan chairman Carlos Ghosn waits for the French President Emmanuel Macron to arrive for a visit of the Renault factory in Maubeuge northeastern France on November 8, 2018.


Analysts have said it could be hard for Nissan to avoid blame, whether it turns out that other executives had knowledge of Ghosn's misconduct, or that the company lacked adequate internal controls. If they plead not guilty, the case is likely to go to trial, and Ghosn could face a fine of up to $6.2 million (700 million yen) and 10 years in prison, Nikkei reports.

Prosecutors suspect that from fiscal 2010 to 2014, Ghosn only listed about half of his annual salary in Nissan's annual securities reports, with about 5 billion yen ($44.5 million) kept off the books as deferred payments to be made to Ghosn after he left Nissan.

The affair represents a staggering fall from grace for a figure celebrated for saving Nissan from the brink of bankruptcy and rebuilding it as a money-making subsidiary of Renault. The conviction rate for those charged is more than 99 percent.

Saikawa, a former protege of Ghosn's, is now potentially succeeding him as Nissan's chairman after already taking over as CEO previous year.

He also denied that the two would be forced to make confessions. "We will continue to do so", the Nissan spokesman said.

The legal dispute has been fierce in recent days, showing that Ghosn and Nissan are not just clashing in Japan, where the scandal first broke and where Ghosn was formally charged yesterday, but around the world. Saikawa, a former protege of Ghosn's, is now potentially succeeding him as Nissan's chairman after already taking over as CEO past year. The carmaker said it found the safes when it did an audit of the apartment following Ghosn's firing.

Renault and Nissan have complicated cross-shareholdings, and poor relations would make operations hard.

Despite selling fewer vehicles, Renault has a 43% shareholding in Nissan, while Nissan's stake in Renault is only 15%.

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