Nissan and its ex-chief Carlos Ghosn charged with hiding £35m
- Author: Wendy Palmer Dec 11, 2018,
Dec 11, 2018, 8:37
In a fall from grace that stunned the business world, the former Nissan chairman was arrested on Nov 19 on suspicion of under-declaring his income by some five billion yen (S$60 million) between 2010 and 2015.
A source said Mr Ghosn, Mr Kelly and Nissan itself will be indicted as early as Monday. "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".
The statement said Nissan would work to improve its corporate governance and compliance, "including making accurate disclosures of corporate information".
The prosecutors issued statements also outlining new allegations Monday against Ghosn and Greg Kelly, the other executive.
Court proceedings in Brazil started on November 29 when a lawyer for Ghosn asked a judge to grant him access to the Rio apartment. Prosecutors have also said little.
As the maximum period of detention allowed by Tokyo police for the first set of charges expires Monday, Dec. 10, a Brazilian court has granted Ghosn access to his Nissan-owned Rio abode located in the swanky, beachfront neighborhood of Copacabana. He said Ghosn and Kelly were being detained because they are considered flight risks.
Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn, Nissan and Kelly.
Yesterday's indictment in Japan puts the ball back in the court of Nissan's alliance partner, Renault.
The details of his re-arrest are still unclear, but local media said it was possibly related to accusations of three additional years of under-reporting his income. Analysts and legal experts say it will be hard for Nissan and its Chief Executive Hiroto Saikawa to avoid blame, regardless of whether other executives knew about Ghosn's misconduct or that the company lacked internal controls.
But the two Japanese firms have both sacked him as chairman.
Ghosn, 64, has not commented.
The apartment was bought on expectations that Ghosn's trips to Brazil, where he was born and maintains citizenship, would "become more constant" after the factory opened, Nissan said in the filings. They both remain on Nissan's board pending a shareholder's meeting.
The news has apparently affected the company's shares, as Nissan stocks plummeted almost 3 percent to the lowest point since the arrest.
According to the Nikkei Asian Review, Ghosn stands accused of reporting only about half of the actual $88 million he earned over the eight-year time-frame by failing to report deferred income and the purchase of several homes around the world that the company bought for him to use.
Nissan has begun the process of choosing Ghosn's successor, with the final decision expected on December 17. Nissan is keen to achieve a more equal power balance but its demands have been stonewalled by Renault and the French state.