Nissan, Ghosn, Kelly indicted over under-reported pay

Nissan, Ghosn, Kelly indicted over under-reported pay

Ghosn, 64, who is credited with having rescued Nissan from near-bankruptcy in the 1990s, was arrested by prosecutors on November 19 on a charge of violating a financial law by making misstatements in the reports for the five fiscal years from fiscal 2010.

After its indictment was announced, Nissan said it took the situation seriously.

On Monday, he was charged with making a mis-statement on Nissan's annual securities report.

Ghosn has not issued any public statement following his arrest, but he is reported to have denied the allegations to prosecutors. A court date is still undecided as the prosecutors continue to question Ghosn and Kelly.

The Tokyo prosecutors' office said it could not comment.

Police motorcycles pass by Tokyo Detention Center background where former Nissan chairman Carlos Ghosn is being detained Monday Dec. 10 2018
Police motorcycles pass by Tokyo Detention Center background where former Nissan chairman Carlos Ghosn is being detained Monday Dec. 10 2018

Nissan has said that an internal investigation found three types of misconduct: underreporting income to financial authorities, using investment funds for personal gain and illicit use of company expenses.

Earlier, Renault, Nissan and Mitsubishi emphasised that they remained "committed" to their alliance, but failed to name an interim boss to stand in for Ghosn, who remains chairman of Renault.

Japan's securities watchdog, the Securities and Exchange Surveillance Commission, said the crime carried a fine of up to 700 million yen ($6.21 million).

In the first sign of blowback from the scandal for Nissan, the carmaker was indicted for breaching Japan's financial instruments and exchange law by under-reporting Ghosn's compensation.

One of the mostly highly-paid corporate bosses in Japan, Ghosn began his career at French tyre manufacturer Michelin in 1976, before moving on to Renault in 1996 where his cost-slashing measures earned him the nickname "Le Cost Killer".

Ghosn's family obtained a favourable injunction last week that was then swiftly overturned, but Japanese newspaper Nikkei reported the family obtained another favourable court decision yesterday.

While the Japanese automaker has stepped up its offensive against Ghosn, seeking to block access by his representatives to an apartment in Rio de Janeiro citing a risk that the executive may remove or destroy evidence, the European partner has kept him on as its chairman and CEO. Nissan offered up a presentation summarizing his alleged transgressions, but Renault declined, requesting the presence of lawyers and the full report on the allegations, the people said.

The Nissan CEO emerged this year as an opponent of Ghosn's ambitions to deepen the company's alliance with Renault SA via a merger.

For months, Ghosn had expressed his intention to reform the Nissan management team and conveyed his idea of replacing Saikawa to some executives, the paper said.

While visits by people from outside the detention center are restricted, lawyers and embassy officials are allowed to meet them.

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

Nissan shares dropped 2.90 percent to 945 yen in Monday trading and the firm voiced "its deepest regret" over the affair.

Despite selling fewer vehicles, Renault has a 43% shareholding in Nissan, while Nissan's stake in Renault is only 15%. Nissan is keen to achieve a more equal power balance but its demands have been stonewalled by Renault and the French state.

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