Both Nissan and its former chairman Carlos Ghosn have been charged by Japanese prosecutors over financial misconduct, according to a statement from Nissan.
Ghosn was arrested in November for under-reporting his compensation in the company’s financial statements over a period of five years. The auto giant said in a statement in November that “over many years” Ghosn and board director, Greg Kelly, had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report.
Nissan added that, in regards to Ghosn, “numerous other significant acts of misconduct have been uncovered, such as personal use of company assets.” The company said Ghosn had also made inappropriate investments.
On Monday, Nissan confirmed that both Ghosn and Kelly had been indicted for “violating the Japan Financial Instruments and Exchange Act, namely making false disclosures in annual securities report.”
Prosecutors have also charged Nissan as a legal entity for the same violation, the company confirmed.
“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 said in a statement.
Ghosn, who headed the Renault-Nissan-Mitsubishi alliance, has previously denied the accusations.
An alliance between Renault, Nissan, and Mitsubishi has been built up over the last two decades. Nissan and the French government each own 15 percent of Renault. In turn, the French auto firm holds a 43 percent stake in Nissan.
Ghosn is considered a hugely influential executive within the global automotive industry. The cross-ownership alliance of Renault, Nissan, and Mitsubishi have all enjoyed an upswing in fortunes under his leadership. After successfully restructuring Renault in the late 1990s, Ghosn earned the nickname “Le Cost Killer.”
Born in Brazil, Ghosn became the world’s first person to run two companies on the Fortune Global 500 simultaneously when he assumed the CEO roles at both Renault and Nissan in 2005. He stepped down as Nissan CEO in 2017.
In June this year, Renault shareholders voted by a slim majority to approve a 7.4 million euro ($8.4 million) pay package for Ghosn’s work in fiscal 2017. According to other securities filings, Ghosn earned 735 million Japanese yen ($6.52 million) from Nissan and 227 million yen from Mitsubishi for the same period.
— CNBC’s David Reid contributed to this report.
