Indicted Nissan Ex-Boss to Face Fresh Charges

Indicted Nissan Ex-Boss to Face Fresh Charges

 

Embattled chairman of Nissan Motors, Carlos Ghosn has been indicted for understating his income by about half of the actual $88 million (10 billion yen) over five years beginning 2010.

Now, more scrutiny is coming on the Japanese Carmaker itself and some other top officials.

 

Nissan itself was indicted on Monday for making false statements in annual reports, according to local reports.

Fresh allegations are being prepared against Nissan and the two executives according to Tokyo authorities. Media reports have said the fresh crime was for three additional years of under-reported income. The two men would be kept in custody without bail this time.

Nissan has said it has continued to cooperate with prosecutors’ office and is providing them with information related to misconducts as requested.

Another source has said there are growing concerns within the company that Chief Executive Hiroto Saikawa and others may also be indicted.

 

Analysts have said it could be difficult for Nissan to avoid blame, whether it turns out that other executives had knowledge of Ghosn’s misconduct, or that the company lacked adequate internal controls.

 

‘Normally, if it’s falsifying the financial filings, the company, as well as the perpetrator, is charged. That’s not surprising. It’s to be expected,’ said prominent lawyer and former prosecutor Nobuo Gohara.

ALSO READ: Nissan Chairman Carlos Ghosn Arrested Over Financial Wrongdoing

‘Now suddenly the issue of CEO Saikawa becomes bigger. It becomes difficult to overlook Saikawa’s role in all of this. That becomes the main focus now.’

 

Ghosn and Kelly have not made any statement through their lawyers, but Japanese media reported that they have denied the allegations.

Nissan on offensive

Nissan has sought to distance itself from the disgraced former chairman by taking on the offensive. The company said Sunday it was blocking Ghosn’s access to an apartment in Rio de Janeiro, citing a risk that the executive may remove or destroy evidence.

A Brazil court has granted Ghosn access to the Copacabana property owned by Nissan. The company said in a statement that it is in the process of challenging the decision.

Nissan has also blamed Ghosn for a series of infractions including personal use of company funds. It has admitted the scandal revealed a flaw in its corporate governance and has agreed to establish a committee that will take advice from independent third party groups to help it improve its governance and oversight of director compensation.

 

The arrest of Ghosn and Kelly also shook the foundations of the Renault-Nissan alliance and stunned the auto industry. Ghosn remains chairman and chief executive of Renault SA.

 

It’s however unclear how the ownership structure of the Renault-Nissan alliance will change. That is the most crucial question yet to be answered in the face of the scandal.

 

Ghosn, under pressure from the French government, had pushed for a deeper tie-up including a possible full merger between Renault and Nissan, despite strong reservations at Nissan.

 

Some Nissan executives have long been unhappy with what they see as Renault’s outsized influence over the Japanese automaker, which dwarfs Renault in vehicle sales.

 

Renault holds around 43 percent of Nissan, while Nissan has a non-voting 15 percent stake in the French partner.

 

($1 = 113.5700 yen)

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