Nissan, Ghosn charged with financial misconduct

TOKYO • Tokyo prosecutors officially charged ousted Nissan Motor chairman Carlos Ghosn yesterday with under-reporting his income and extended his detention on suspicion of additional financial misconduct.

The prosecutors also indicted Nissan for filing false financial statements, making the Japanese automaker culpable for the scandal that has shocked the auto industry.

Ghosn was arrested on Nov 19 on suspicion of conspiring to understate his compensation by about half of the actual 10 billion yen (S$122 million) over five years from 2010. He has been held in a Tokyo jail since then for questioning, but had not been officially charged till now.

Prosecutors also rearrested him yesterday for allegedly understating his income for three more years until March this year.

Nissan, which fired Ghosn as chairman days after his arrest, has said the misconduct was masterminded by the once-celebrated executive with the help of former representative director Greg Kelly, who was also officially charged for the first time yesterday.

Ghosn and Kelly have not made any statement through their lawyers, but Japanese media reported that they have denied the allegations. Calls to Ghosn's lawyer Motonari Otsuru at his office went unanswered.

After its indictment was announced, Nissan said it took the situation seriously. "Making false disclosures in annual securities reports greatly harms the integrity of Nissan's public disclosures in the securities markets, and the company expresses its deepest regret," it said in a statement.

Japan's securities watchdog, the Securities and Exchange Surveillance Commission, said the crime carried a fine of up to 700 million yen .

Nissan has stepped up its offensive against the executive once credited for rescuing the company from near-bankruptcy.

The company said on Sunday that it was seeking to block access by Ghosn's representatives to an apartment in Rio de Janeiro, citing a risk that the executive may remove or destroy evidence.

A Brazil court has granted Ghosn access to the property, owned by Nissan, in the Copacabana neighbourhood, but the firm said in a statement that it was now petitioning a higher court to reverse the decision. Nissan has also blamed Ghosn for a series of infractions, including personal use of company funds.

Nissan's board last month agreed to create a special committee and take advice from an independent third-party group about how to improve governance and oversight of director compensation.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 11, 2018, with the headline 'Nissan, Ghosn charged with financial misconduct'. Print Edition | Subscribe