TOKYO - Carlos Ghosn, the ousted chairman of Japan's Nissan Motor Co, is being held in Tokyo's main detention centre after allegations against him of financial misconduct. Japanese authorities will have to file charges by Dec. 12 or let him go.
The compensation packages for Ghosn, one of the most celebrated and well-paid leaders in the global auto industry, have been a sore point among investors of the Renault-Nissan alliance which he helped launch in 1999.
The scandal comes just five months after Ghosn, 64, narrowly won a shareholder vote at Renault over his 7.4 million euro pay package for 2017. He had lost the vote in 2016.
The following are allegations made by Nissan and the media. There has been no public comment from Ghosn on the allegations, and Reuters could not contact him or his lawyers for comments.
Japanese prosecutors allege Ghosn and fellow board member Greg Kelly, who is also being held for questioning, conspired to under-report by about half the 10 billion yen ($88 million) Ghosn earned at Nissan over five years from fiscal 2010 in filings to the Tokyo Stock Exchange.
Nissan declined to give further details about the under-reporting, but the Nikkei business daily, citing unidentified sources, said Ghosn had received share price-linked compensation of about 4 billion yen over a five-year period to March 2015 and it went unreported in Nissan's financial reports.
The financial reports also did not mention annual compensation of 100 million to 150 million yen Ghosn received from the automaker's overseas subsidiaries, the newspaper said.
The Wall Street Journal reported, citing people familiar with the investigation, that Ghosn earned 8 billion yen in what Nissan calls unreported deferred compensation in the eight years that ended in March 2018.
The structure was formulated in consultation with Kelly, and Ghosn told colleagues that if he was set to receive the deferred money after retirement, it wouldn’t have to be reported in Japanese regulatory filings, the report said.
The Asahi newspaper also reported, without citing sources, that Ghosn had understated his remuneration at Nissan by around 8 billion yen in the eight years through the fiscal year that ended in March, including 3 billion yen over the last three fiscal years.
MISAPPROPRIATION OF FUNDS
Nissan Chief Executive Hiroto Saikawa said last week that a months-long internal investigation had also uncovered evidence that Ghosn used company funds for personal purposes and misrepresented the company's investments.
Japanese public broadcaster NHK reported Nissan paid billions of yen for the purchase and renovation of homes for Ghosn in Rio de Janeiro, Beirut, Paris and Amsterdam, citing unnamed sources. The properties had no business purpose and were not listed as benefits in filings to the Tokyo bourse, it said.
The Nikkei last week reported that Nissan through a British Virgin Island unit of a Dutch venture fund subsidiary bought and renovated homes for Ghosn in Brazil and Lebanon worth around $18 million.
Nissan, the report added, also paid several hundred thousand dollars for Ghosn's family vacations.
The Yomiuri, Japan's biggest-circulation daily, said Nissan had been paying Ghosn's elder sister $100,000 a year since 2002 for a non-existent advisory role. She lived in a luxury Rio de Janeiro apartment funded by a Nissan subsidiary, according to the report, which cited unidentified sources.
Japanese media reported that Ghosn and Kelly have denied allegations against them, claiming that part of Ghosn's compensation had been put aside until he left the company and therefore was not subject to disclosure.
NHK said that Kelly told investigators that he had discussed the plan with other executives at Nissan.
Ghosn has yet to make any statement through his lawyers, while The Tokyo District Public Prosecutors remains tight-lipped about what they intend to do with the former Nissan chief and his colleague.
French Finance Minister Bruno Le Maire weighed in on Sunday saying he had yet to see evidence to support allegations of wrongdoing.