News - Nissan
Ghosn, Kelly indicted in Japan
Former Nissan boss Carlos Ghosn indicted for suspected false income reporting
11 Dec 2018
OUSTED Nissan Motor Company representative director and chairman Carlos Ghosn has been officially indicted in Japan along with former representative director Greg Kelly for allegedly making false disclosures in annual securities reports.
The two former senior officials have allegedly violated the Japan financial instruments and exchange act, which also means Nissan, as a legal entity, has been indicted for the same violation.
Mr Ghosn was removed as chairman by the Nissan Motor Company board in November after he and Mr Kelly were arrested by the Japanese Public Prosecutors Office on suspicion of financial misconduct.
Reports have claimed that from 2010 to 2014, Mr Ghosn under-reported his salary by approximately ¥5 billion ($A61.5 million), with Mr Kelly, a 30-year veteran of Nissan, acting as the “mastermind” in the deception.
According to US publication Automotive News, the indictment comes amid new allegations that the two executives also hid ¥4 billion ($A49 million) in the 2015-17 financial years.
An internal investigation at Nissan suggested the combined total amount was being hidden by Ghosn for a deferred payment at a later date.
Nissan issued a statement in Japan confirming the three indictments, and expressed its regret in the release.
“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,” the company said.
“Nissan will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”
Both Mr Ghosn and Mr Kelly had been held without formal charge in Tokyo since their arrest on November 19 with a 22-day detention period, however their new re-arrest means they will remain in custody without bail for another 20 days.
According to Japanese newspaper Nikkei, both Mr Ghosn and Mr Kelly could face up to ten years in prison, a ¥10 million ($A123,003) fine or both, while corporations can be fined up to ¥700 million ($A8.6m).
Mr Ghosn played a large part in helping rescue Nissan from near-bankruptcy when he took the reins in 1999, and was pivotal in establishing the Renault-Nissan-Mitsubishi Alliance that now stands as the world’s largest automotive group.
Mitsubishi has announced its intentions to remove Mr Ghosn from the company, however Renault has said it plans to wait for evidence from the allegations to make a decision on whether to remove Mr Ghosn from the board. Chief operating officer Thierry Bollore has temporarily taken the reins of the French company while the investigation is carried out.
The companies issued a joint statement late last month that there are no plans to disband the alliance, and that all members have “emphatically” reiterated their desires to remain together, saying the alliance has resulted in “unparalleled success in the past two decades”.
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