By on December 10, 2018

Carlos Ghosn Rogue Introduction - Image: Nissan

Carlos Ghosn, his right-hand man, Greg Kelly, and the automaker Ghosn headed for years have been indicted by Japanese authorities following the pair’s re-arrest. The new raft of financial allegations raised last week gave the authorities the ability to keep Gosn and Kelly locked up until official charges could be laid.

Nissan, whose board ousted Ghosn as chairman shortly after his November arrest in Tokyo, didn’t get a free pass in the matter. Apologies were in order, but legal pain awaits.

As you’re already well aware, Ghosn and board member Kelly are accused of underreporting Ghosn’s income to the Japanese finance ministry to the tune of tens of millions of dollars. According to Japan’s Nikkei newspaper (via Automotive News), prosecutors have accused the two men of violating the country’s Financial Instruments and Exchange Act. This charge covers the 2010-2014 fiscal years, when Ghosn and Kelly allegedly conspired to underreport the then-CEO’s income by $44.4 million.

Nissan confirmed the indictment Monday morning:

Today, Nissan Motor Co., Ltd.’s former Representative Director and Chairman Carlos Ghosn and former Representative Director Greg Kelly were indicted for violating the Japan Financial Instruments and Exchange Act, namely making false disclosures in annual securities reports.

Nissan, as a legal entity, was also indicted for the same violation.

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.

Nissan will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.

Ghosn and Kelly are also accused of pulling the same act for the 2015 to 2017 fiscal years, during which they allegedly covered up $35.5 million in compensation. This is what led to the pair’s re-arrest, which would have allowed the two to be held in a Tokyo jail without charges until the end of the year. Japan doesn’t mess around on matters like this. Both Ghosn and Kelly face up to 10 years in prison if found guilty of the charges.

The ousted chairman (of both Nissan and Mitsubishi), who remains CEO of alliance member Renault, claims innocence. There’s a hazy matter here of deferred income. Nissan claims Ghosn and Kelly arranged, over the course of the current decade, to have nearly $80 million paid out after Ghosn’s retirement, but any deferred income still needs to be reported to securities regulators. Ghosn and Kelly reportedly claim they weren’t required to report the income, as the exact amount wasn’t set in stone.

Speaking to AN, Masaru Wakasa, a former deputy at the Tokyo prosecutor’s special investigation, said prosecutors have likely determined that financial reporting of the deferred income was indeed necessary.

The indictment should allay Nissan’s fears that Ghosn might attempt to destroy evidence if released from detention. On the weekend, Reuters reported that the automaker was attempting to block access to Ghosn’s apartment in Rio de Janeiro’s swanky Copacabana neighborhood.

Nissan reportedly planned to drop the executive even before his arrest, following an internal investigation sparked by a whistleblower.

[Image: Nissan]

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6 Comments on “Ghosn, Nissan Indicted by Japanese Authorities...”

  • avatar

    Would you buy a brand new car from this man?

  • avatar

    Were the new cars he sold associated with exploding gas tanks, or ignitions that would shut off while driving— Killing the car’s occupants? No?
    OK, hat does it take for a “car salesman” to go to jail?

    Under reporting income while successfully saving a company from possible bankruptcy? Or, more likely maybe steering Japanese companies away from Japanese control?
    Yeah, give ‘em the chair!

    (Yes I would buy a new car from that man.)

  • avatar

    That photo answers the question: “What if I Armor Alled the whole dang car?!”

  • avatar
    schmitt trigger

    There is a very interesting article in Japan Times, which argues that Ghosn’s arrest is really a test for the Japanese criminal justice, which will be widely watched internationally.

    I won’t spoil it for you, have a read:

    BTW, Ghosn’s article photo looks really menacing.

  • avatar

    Who would have known the honorary citizenship would come around to bite his tush ten yrs down the road.

  • avatar
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