Business World

Saturday 21 September 2019

Nissan and ex-chairman Ghosn charged in scandal

Big news: A street monitor in Tokyo broadcasts news reporting the indictment and re-arrest of ousted Nissan chairman Carlos Ghosn. Photo: Reuters
Big news: A street monitor in Tokyo broadcasts news reporting the indictment and re-arrest of ousted Nissan chairman Carlos Ghosn. Photo: Reuters

Kiyoshi Takenaka

Tokyo prosecutors have indicted ousted Nissan Motor chairman Carlos Ghosn for allegedly under-reporting his income and also officially charged the carmaker, making the firm culpable for the financial misconduct scandal that has shocked the industry.

Mr Ghosn was arrested on November 19 on suspicion of conspiring to understate his compensation by about half of the actual 10 billion yen (€77m) over five years from 2010. He has been held in a Tokyo jail since then for questioning, but had not been officially charged. Prosecutors re-arrested him yesterday on fresh allegations of understating his income for three more years through March 2018.

Nissan, which fired Mr Ghosn as chairman days after his arrest, has said the alleged misconduct was masterminded by the once-celebrated executive with the help of former representative director Greg Kelly, who was also indicted for the first time on Monday. Mr Ghosn and Mr Kelly have not made any statement through their lawyers, but Japanese media reported that they have denied the allegations. Calls to Mr Ghosn's lawyer, Motonari Otsuru, at his office went unanswered.

Nissan, indicted for filing false financial statements, said it takes the charge 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, adding it will correct past financial reports to include appropriate compensation figures. Japan's Securities and Exchange Surveillance Commission (SESC), said the crime carried a fine of up to 700m yen (€5.4m).

Analysts and legal experts say it will be difficult for Nissan and CEO Hiroto Saikawa to avoid blame, regardless of whether other executives knew about Mr Ghosn's misconduct or that the company lacked internal controls. "It becomes difficult to overlook Saikawa's role in all of this. That becomes the main focus now," lawyer and former prosecutor Nobuo Gohara said.

Mr Ghosn, if convicted, faces up to 10 years in prison and/or 10 million yen in fines under the Financial Instruments and Exchange Act.

Mr Ghosn's arrest marks a dramatic fall for a leader once hailed for rescuing Nissan from the brink of bankruptcy.

The once-feted executive has been treated like others in detention, held in a small chilly room. Authorities have limited his opportunities to shower and shave, according to a person familiar with the matter.

Reuters

Irish Independent

Also in Business