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Abu Dhabi, UAEWednesday 24 April 2019

Japanese prosecutors indict Ghosn and Nissan as revelations of company politics emerge

The new allegations will extend the detention of the ousted chairman and aide Greg Kelly

 Japanese prosecutors have charged Carlos Ghosn with financial misconduct. Nissan has also been charged under the indictment. EPA
 Japanese prosecutors have charged Carlos Ghosn with financial misconduct. Nissan has also been charged under the indictment. EPA

Japanese prosecutors have indicted Nissan and charged its former chairman Carlos Ghosn, as well as his aide Greg Kelly, over allegations related to underreporting Ghosn's pay by about 5 billion yen (Dh162.93 million) over a five-year period, Kyodo News reported.

The latest development comes as the Wall Street Journal also reported Mr Ghosn was planning to replace his protege and Nissan chief executive Hiroto Saikawa before he was arrested last month. Mr Saikawa has lambasted his former boss, saying he wielded too much power at the automaker.

The fresh charges extend the detention of Mr Ghosn and Mr Kelly, a development that was expected – as under Japanese law, a suspect must be released after 22 days if their case doesn't advance. Both executives were arrested on November 19. The new indictment allows prosecutors to extend the detention of both executives until December 30 and subject them to further investigation. Nissan shares fell 2.75 per cent at 10.18am UAE time on Monday, extending a three-day loss.

Ghosn, 64, who has been at Nissan for two decades and oversaw the Nissan-Renault-Mitsubishi alliance, which produces about 11 million cars annually, was initially arrested for violating a financial law by conspiring to misstate his earnings and misusing Nissan funds to purchase property in four cities outside Japan.

Mr Ghosn's arrest has raised questions about the future of the alliance between Renault and Nissan. The pact gives more weight to Paris than to Tokyo, a long-running source of frustration for the Japanese. The French government has a 15 per cent stake in Renault and is the largest shareholder in the company. The French carmaker owns 44 per cent of Nissan.

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Separately, Japan’s Securities and Exchange Surveillance Commission filed criminal charges against Ghosn, Kelly and Nissan for underreporting 5bn yen, according to Kyodo News.

Nissan’s board which ousted Mr Ghosn and Mr Kelly on November 22 is due to vote on their choice of Mr Ghosn's successor on December 17.

Top of the list for possible successors are two executives at opposite ends of the spectrum: Nissan chief executive Hiroto Saikawa, a protege of Mr Ghosn 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.

Updated: December 10, 2018 02:56 PM

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