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Ghosn, Nissan Indicted in Japan

Nissan and former executives Carlos Ghosn and Greg Kelly were formally indicted for violations of Japan’s financial instruments and exchange law.

Tariq Kamal
Tariq KamalFormer Associate Publisher
Read Tariq's Posts
December 10, 2018
Ghosn, Nissan Indicted in Japan

Japanese prosecutors have officially charged former Nissan chairman Carlos Ghosn with underreporting tens of millions of dollars in compensation over a five-year period.

Photo by Adam Tinworth via Flickr

2 min to read


TOKYO — Nissan Motor Co. and its erstwhile chairman, Carlos Ghosn, were formally charged with financial crimes in Japan Monday. Also indicted was former representative director Greg Kelly, who was arrested along with Ghosn Nov. 19 on charges that resulted from an internal investigation at Nissan.

Directors claimed to have uncovered numerous financial irregularities, including millions of dollars in unreported income. The board shared their findings with Japanese prosecutors and ousted Ghosn and Kelly shortly following their arrests. Ghosn also drew compensation from Renault and Mitsubishi as part of a nearly 20-year-old three-factory alliance. Renault has appointed an acting chief executive but has yet to officially remove Ghosn as chairman and CEO.

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Ghosn, 64, and Kelly, 62, were indicted for conspiring to underreport Ghosn’s income over a five-year period that ended in March 2015. If convicted, they face a maximum penalty of 10 years in prison and a 10 million yen ($89,000) fine. Nissan faces a potential fine of up to 700 million yen ($6.2 million) for its role in the alleged crimes.

Ghosn and Kelly were also rearrested Monday on new charges pertaining to income earned between 2015 and 2017, almost certainly prolonging their three-week detention. The Japanese legal system allows authorities to hold suspects without bail for 72 hours after their arrest and seek a court order for another 20 days, all without charge. Prosecutors there are allowed to interrogate suspects without their attorneys present, and they enjoy a conviction rate unheard of in American courts: Only about 1% of cases brought to trail in Japan result in an acquittal or dismissal.

The nature of the system discourages public comment from detainees and defendants. Ghosn has yet to issue a statement since his arrest. In a press release, Nissan’s board pledged to step up their internal compliance efforts.

“Nissan takes this situation extremely seriously,” directors wrote, in part. “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.”

Topics:Industry

Originally posted on Auto Dealer Today

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