Nissan itself will be indicted alongside Ghosn, report says
10 December 2018 - Autoblog
Nissan accused of failing to stop alleged misconduct
Prosecutors in Tokyo are expected to file charges against Nissan itself alongside an expected indictment against former Chairman Carlos Ghosn as part of the ongoing financial misconduct case. That's according to a report from Japan's Nikkei business daily, which does not identify its sources.
Charges are also likely against Greg Kelly, a member of Nissan's board of directors who was taken into custody with Ghosn Nov. 19 after Japanese authorities questioned the former chairman aboard a corporate jet at the Tokyo Haneda airport. Monday is the deadline when prosecutors must either indict the two executives, release them or arrest them on new allegations.
Both men are accused of under-reporting salaries in five annual reports that stretch through the fiscal year that ended in March 2015. The Nikkei says they'll also be arrested on new allegations of misstating financial information for the subsequent three business years. Nissan would be charged for not preventing the alleged crime.
Both men have reportedly denied the allegations. In response to the Nikkei report, a spokesman for Nissan told Automotive News the company had "identified serious misconduct related to the reporting of Mr. Ghosn's compensation" and was cooperating with investors. The turmoil over Ghosn prompted the automaker to scrap plans to unveil a long-awaited longer-range Leaf electric car at the L.A. Auto Show last week.
Ghosn is accused of conspiring to understate his income by about half the 10 billion yen (about $88 million) over the period. Reports say the issue relates to deferred compensation that Nissan CEO Hiroto Saikawa reportedly signed off on but may not have understood. The company didn't report the deferred compensation in Japanese securities filings as it is required, since the money is considered a future liability against the company. Automotive News cites an unnamed source who says Nissan has identified some $80 million in unreported deferred compensation promised to Ghosn.
Nissan's board voted Nov. 22 to oust him as chairman, and Mitsubishi followed suit days later. Ghosn remains the CEO and chairman of Renault, however. Under Ghosn's guidance, Nissan and Renault joined forces in 1999 when Nissan was teetering toward bankruptcy. Mitsubishi joined on in 2016, with all three members able to jointly develop products and control costs. He had reportedly been pushing for deeper ties, including a possible merger between Nissan and Renault at the urging of the French government.
Renault owns a 43-percent stake in Nissan, the biggest of the three automakers, while Nissan holds a 15-percent non-voting stake in Renault. Ghosn's arrest has set off intense speculation about power struggles among the alliance members.