Published: Tue, December 11, 2018
Money | By Wilma Wheeler

Japanese prosecutors indict Ghosn, Nissan for understating pay: Kyodo

Japanese prosecutors indict Ghosn, Nissan for understating pay: Kyodo

But the plan was derailed by Ghosn's arrest for alleged financial misconduct on Nov 19, according to the report citing people with knowledge of the matter. Prosecutors also indicted Ghosn's close aide and former representative director at Nissan, Greg Kelly, and the Japanese automaker itself.

A Brazilian court has granted Ghosn access to the property, owned by Nissan, in the Copacabana neighborhood, but the company said in a statement Sunday that it is now petitioning a higher court to reverse the decision.

The auto company itself has also been charged - accused of making false statements in annual reports - according to the reports.

Nissan shares fell 3 percent in Tokyo following Monday's developments.

Ghosn, the architect of the Renault-Nissan-Mitsubishi Alliance, was arrested in Japan in November accused of under-reporting his salary and using company assets for personal use.

For months, Ghosn had expressed his intention to reform the Nissan management team and conveyed his idea of replacing Saikawa to some executives, the paper said.

Prosecutors accuse Ghosn of deliberately understating his salary by some 3 billion yen ($27 million) between 2015 and 2017, a crime which may land him in prison for up to 10 years.

Prosecutors suspect that from fiscal 2010 to 2014, Ghosn only listed about half of his annual salary in Nissan's annual securities reports, with about 5 billion yen ($44.5 million) kept off the books as deferred payments to be made to Ghosn after he left Nissan. Nissan offered up a presentation summarizing his alleged transgressions, but Renault declined, requesting the presence of lawyers and the full report on the allegations, the people said.

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

Saikawa, a former protege of Ghosn's, is now potentially succeeding him as Nissan's chairman after already taking over as CEO a year ago. He said Ghosn and Kelly were being detained because they are considered flight risks. Tokyo authorities also plan to re-arrest the two executives, sources said, declining to be named as they were not authorized to speak with media. Companies can be fined up to 700 million yen ($6.2 million).

"We are closely watching if he is actually indicted and then found guilty", said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm.

In Japan, prosecutors and defendants begin a trial at a district court and can appeal to a high court and the Supreme Court.

A separate source said there were concerns running through the company that Chief Executive Hiroto Saikawa and others may also be indicted. Saikawa, a former protege of Ghosn's, is now potentially succeeding him as Nissan's chairman after already taking over as CEO a year ago. The French carmaker is the largest shareholder in Nissan and has voting rights, while the Japanese company is the second-largest shareholder in Renault, with no votes.

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