Nissan and ex-chair face charges over pay reporting
10 Dec 2018
Japanese car giant Nissan and its former chairman Carlos Ghosn and an adviser, representative director Greg Kelly, have been indicted for violating the Japan Financial Instruments and Exchange Act, by making false disclosures relating to the executive’s pay in annual securities reports
10 Dec 2018
The formal charges against Ghosn come three weeks after he was unexpectedly arrested in Tokyo. He has also been re-arrested on further allegations of understating his remuneration package and is likely to be in detention until 30 December.
Japanese prosecutors claim that both Nissan and Ghosn underreported his compensation on company financial reports over five years.
Ghosn was actually paid ¥1.78bn (£12.4m) in the year ended March 2011 but Nissan reported only ¥982m, the indictment alleges. For the four years from April 2011 to March 2015, Ghosn’s actual compensation was ¥8.08bn but Nissan reported only half that amount, prosecutors claimed.
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 markets, 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.’
Ghosn has not made a statement about the indictment but has previously denied all accusations of wrongdoing.
In total, Ghosn is suspected of having accumulated around ¥9bn in deferred pay over a period of nine years. If found guilty, he could face a penalty of up to 10 years in prison, a fine of up to ¥10m, or both. Nissan could face a fine of up to ¥700m.
Report by Pat Sweet