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Nissan, former chairman charged for failing to report millions in income

By Clyde Hughes
Former Nissan chairman Carlos Ghosn was indicted Monday for not fully reporting income from the Japanese automaker. File Photo by Keizo Mori/UPI
Former Nissan chairman Carlos Ghosn was indicted Monday for not fully reporting income from the Japanese automaker. File Photo by Keizo Mori/UPI | License Photo

Dec. 10 (UPI) -- Japanese prosecutors filed charges against Nissan and former chairman Carlos Ghosn Monday, saying he reported only half of $89 million he made with the company.

Ghosn was arrested in Tokyo Nov. 19 and indicted Monday with Greg Kelly, Nissan's representative director, the Wall Street Journal reported.

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The controversy centers around millions in deferred payments to Ghosn over a period of nine years he would receive after retirement. Kelly believed the future payments were not fixed amounts and didn't need to be reported, his attorney said. Ghosn has denied wrongdoing.

A Nissan investigation said Ghosn hid about $79 million in deferred compensation that would not have distributed until retirement.

"As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan's chief executive officer Hiroto Saikawa will propose to the Nissan board of directors to promptly remove Ghosn from his positions as chairman and representative director," Nissan said last month.

Japanese prosecutors must show the amount and timing of future payments to Ghosn were definite and there was an obligation to report the payments.

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"Financial statements are an important tool to report to stakeholders, so making a false report in a financial statement is tantamount to deceiving stakeholders. So, this can constitute an actual crime," former Japanese prosecution investigator Masaru Wakasa said. "The investigation is now leaning in the direction prosecutors are aiming."

Ghosn had served as both Nissan's president and chief operating officer since June 2001. He joined Nissan from Renault SA in 1999. He added president of Renault to his title in 2005 and helped guide the move to partner with Mitsubishi Motors. He became chairman of Mitsubishi in 2016.

Ghosn stepped down as Nissan's CEO in 2017, but continued to serve as chairman of its board.

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