Nissan’s Ghosn suspected of using firm’s overseas houses for free

Nissan Motor Co. Chairman Carlos Ghosn is suspected of having used multiple residences purchased by the automaker in the Netherlands and three other countries for free as part of his financial misconduct, sources with knowledge of the situation said Tuesday.

A day after the dramatic fall from grace of the 64-year-old, a towering figure in the automotive industry, the sources said Tokyo prosecutors believe these costs shouldered by the Japanese company are part of salaries he misrepresented in securities reports.

Ghosn, who is also chairman of Renault SA and Mitsubishi Motors Corp., was arrested Monday on suspicion of violating Japan’s Financial Instruments and Exchange Act by understating his pay package in Japan by a total of about 5 billion yen ($ 44 million) over five years from 2011.

In the five-year period, the prosecutors believe Ghosn actually received a total of nearly 10 billion yen in salary but Nissan’s annual securities reports show that his remuneration amounted to about 4.98 billion yen.

The prosecutors and Nissan officials have struck a plea bargaining agreement under which the authorities could decide either not to indict or to pursue lesser charges or seek lighter penalties if suspects or defendants cooperate in investigations, according to the sources.

It is believed to be the second time the system has been used since Japan’s revised criminal procedure law entered into force in June this year.

In July, prosecutors elected not to indict Mitsubishi Hitachi Power Systems Ltd. after reaching a plea bargaining deal with the company over a case involving the bribery by one of its employees of a Thai public servant in relation to a local power plant project.

On Monday, Nissan said it intends to dismiss Ghosn, one of Japan’s highest paid executives, and Representative Director Greg Kelly who allegedly conspired with the chairman, at a board meeting on Thursday.

The Tokyo prosecutors have not disclosed whether Ghosn and Kelly have admitted to their allegations.

The violation of the financial law could entail a punishment of up to 10 years in prison, a fine of up to 10 million yen, or both.

Under the law, a company could face a fine of up to 700 million yen.

In 2010, Japan began requiring listed firms to disclose how much they were paying board members if their remuneration exceeded 100 million yen.

Ghosn has been well-regarded for turning around Nissan, which was on the verge of bankruptcy in late 1990s, through a capital alliance with Renault.

Known as an aggressive cost-cutter, he was appointed chief operating officer of Nissan in 1999 and became president the following year.

The Tokyo District Public Prosecutors Office’s special investigation squad has raided Nissan’s headquarters in Yokohama as part of the investigation.

Nissan Chairman Ghosn arrested for understating salary 5 bil. yen

All — Kyodo News+

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