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Abu Dhabi, UAESunday 16 December 2018

Prosecutors to indict Nissan in financial misconduct case

Company's former chairman Carlos Ghosn is accused of contriving to undervalue his income for over five years

Carlos Ghosn, former chairman of Nissan. AFP
Carlos Ghosn, former chairman of Nissan. AFP

Japanese prosecutors will press charges against the automaker Nissan in the ongoing probe into the suspected under-reporting of salaries by the company’s ousted chairman Carlos Ghosn.

Putting wrong declarations in an annual report is an offence for which corporations can be held liable, in addition to the persons or officials involved, Japan's financial newspaper Nikkei reported. Charges could be framed against Nissan - as a company - on Monday for not stopping its officials from furnishing fabricated details over a number of years.

It is likely that the company and the two former executives will be indicted over misstatements and misreporting of earnings in the five annual reports leading up to the fiscal year ending March 2015.

Mr Ghosn and the company’s former representative director Greg Kelly have been detained since November 19. In accordance with Japanese judicial proceedings prosecutors must take a decision about framing of charges, freeing or rearresting them on new claims on Monday, when their detention duration ends.

Mr Ghosn who has spent two decades at Nissan was detained in Tokyo on accusations of under-reporting his income for years and misusing company funds. The 64-year-old Franco-Brazilian executive of Lebanese descent has denied the allegations, according to NHK, Japan’s national broadcaster.

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Mr Ghosn is accused of contriving to undervalue his income by about half of the actual 10 billion yen ($88.66 million) over five years from 2010 and Mr Kelly is blamed for assisting him, according to Reuters.

Mr Ghosn's arrest has raised questions about the future of the alliance between Renault, Mitsubishi and Nissan that he built and oversaw. The pact between Nissan and Renault gives more weight to the French automaker than its Japanese partner, a long-running source of frustration for the Japanese.

The rest of Nissan’s board is due to vote on their choice of Mr Ghosn's successor on December 17. Possible successors include two executives at opposite ends of the spectrum: Nissan chief executive Hiroto Saikawa, who has spearheaded the investigation into Mr Ghosn’s financial reporting, and Toshiyuki Shiga, a former Ghosn confidante, Bloomberg reported.

The independent directors have already said they will choose an existing board member as the next chairman.