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Abu Dhabi, UAEWednesday 20 February 2019

Nissan under US scrutiny over executive pay disclosures

US Securities and Exchange Commission inquiry follows former chairman Carlos Ghosn's arrest

Nissan CEO Hiroto Saikawa. The US SEC has launched an inquiry into the company. Getty
Nissan CEO Hiroto Saikawa. The US SEC has launched an inquiry into the company. Getty

Nissan said on Monday that it was co-operating with an inquiry by the US Securities and Exchange Commission (SEC) after a report said the regulator was investigating the Japanese car maker's disclosures on executive pay.

Nissan has accused its former chairman Carlos Ghosn, first arrested on November 19, of financial misconduct. Prosecutors have charged Nissan along with Mr Ghosn for under-reporting his pay, according to Reuters. Mr Ghosn has denied the charges.

Nissan confirmed it has received an inquiry and said it is cooperating fully. Through a spokeswoman, Kristina Adamski, the company said it could not provide further details.

The SEC investigation adds to scrutiny surrounding Japan’s second-largest car maker and its executives. Mr Ghosn and another company director, Greg Kelly, were indicted over allegations Mr Ghosn under-reported his income at Nissan by tens of millions of dollars. The car maker also has been indicted, a step that allows prosecutors in Japan to lay formal charges.

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The SEC inquiry, launched out of its Washington headquarters, is focused on whether lapses by Nissan in reporting on its executives’ pay violated US securities law, Bloomberg cited a source as saying. The regulator’s work was slowed by more than a month of partial US government shutdown, another said.

The SEC, which often works closely with law enforcement, could seek financial penalties and injunctions to prevent violation of laws or SEC rules.

John Nester, a spokesman for the SEC, declined to comment.

Aubrey Harwell Jr, an attorney for Mr Kelly, said his client hasn’t received an SEC subpoena and declined further comment. US and Japan-based representatives for Mr Ghosn declined to comment.

In a memo to staff last month, Nissan chief executive Hiroto Saikawa, who succeeded Mr Ghosn as CEO, said oversights in the company’s corporate governance “permitted the situation to continue, which clearly calls for grave reflection”.

Updated: January 28, 2019 10:33 AM

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