Top Nissan figures charged by Japanese prosecutors over financial irregularities
Image credit: REUTERS/Issei Kato
Tokyo-based prosecutors have charged former Nissan chairman Carlos Ghosn with under-reporting his income by tens of millions of pounds. Another senior Nissan figure and the company itself have also been accused of criminal activity.
The criminal charges were filed today against Ghosn, Japan-based Nissan, and Nissan representative director Greg Kelly by the Securities and Exchange Commission. According to an official representing the commission, they are suspected of having falsified reports of Ghosn’s income by five billion yen (£34m) over five years. Under-reporting earnings is a violation of securities law in Japan.
The Brazilian-born businessman joined Nissan in 1999 and is credited with having returned the company from the brink of bankruptcy. He has also served as chairman of Mitsubishi Motors, as CEO of Nissan, Michelin North America and Renault, as well as chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, which held a considerable market share as the world’s third-largest automotive group in 2017.
While arriving at Tokyo International Airport in November, Ghosn was arrested under suspicion of under-reporting his earnings and misusing company assets, having reportedly enjoyed $18m (£14m) luxury residences at the company’s expense. He was subsequently dismissed as chairman of Nissan and Mitsubishi Motors and stripped of his executive rights.
Ghosn has been detained since his arrest at the Tokyo Detention House; Japanese laws allow suspects to be detained for up to 23 days without criminal charges being filed.
Today, Japanese prosecutors announced a fresh set of allegations against Ghosn and Kelly. They are accused of under-reporting a further four billion yen (£28m) in earnings when accounting for the three-year period up to March 2018. Kelly is suspected of having collaborated with Ghosn in his wrongdoing and has also been stripped of his title. Meanwhile, Nissan is accused of having filed false financial statements. Ghosn and Kelly remain on the board.
Now that charges have been filed, Ghosn will face a further 20 days in detention. If found guilty, he faces up to 10 years in jail and 10 million yen in fines (£70,000). Meanwhile, the Securities and Exchange Commission has said that Nissan could be fined up to 700 million yen (£5m).
Kelly’s lawyer has stated that his client is asserting his innocence.
In a statement, Nissan said: “Nissan takes this situation extremely seriously. Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities market and the company expresses its deepest regret.
“Nissan will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”