Japan Extends Ghosns Custody as Financial Misconduct Scandal Persists

Rabat – The Tokyo District Court approved a request from the prosecutors on Wednesday to hold Carlos Ghosn and Nissan Representative Director Greg Kelly  for an extra 10 days, Japanese Kyodo reported Wednesday.Japan arrested Ghosn for alleged on Monday for alleged financial misconduct by underreporting his salary by a total of $44 million over five years since 2011. An internal investigation, based on a whistleblower report, found that “over many years, both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn‘s compensation.” Nissan also accused Ghosn of using company assets for his personal use.Read also: Renault, Nissan Chief Carlos Ghosn Faces Dismissal for MisconductMore allegations of financial misconductDuring the five-year period, Nissan’s chairman is suspected of not stating more than $886,000 worth of annual remuneration in the company’s annual securities reports from a Dutch-based subsidiary,” sources acquainted with the case told the Japanese Kyodo outlet Wednesday.Ghosn is allegedly suspected of underreporting the amount of his salary by billions of Japanese yen over the past three years, “although the company’s annual securities reports stated that the sum was about 2.9 billion yen.”Tokyo prosecutors claim the subsidiary has a serious role in the financial scandal.Ghosn is also suspected of using residences in Brazil, France, Lebanon, and the Netherlands. The Dutch subsidiary purchased the residence “without paying rent or reporting that benefit as part of his compensation.”The Japanese prosecutors consider Ghosn’s “alleged receipt of income from the subsidiary and bonus scheme, as well as the benefit, should have been reported as part of his remuneration,” according to Kyodo.Read also: Renault Names Interim CEO After Carlos Ghosn’s ArrestA legal affairs executive operating under Kelly is believed to be involved in the purchases of the overseas residences, according to  the sources.Kelly is believed to have given instructions to the executive and other officials “to make false statements” in Nissan’s securities reports.If guilty, Ghosn and kelly could face a punishment of up to 10 years in prison and/or a fine of up to $88.5 thousand.Ghosn planned to merge Nissan and RenaultGhosn’s arrest caused a shock in the automotive industry, especially because Ghosn, who leads the Nissan-Renault-Mitsubishi alliance, is considered a highly influential executive within the global automotive industry.The alliance sold over 10 millions vehicles worldwide in 2017.On Tuesday, Nissan’s shares fell by 5.45 percent, while Mitsubishi’s were down 6.85 percent. On Monday, Renault shares tanked more than 8 percent in European trade.Before his arrest, Ghosn had been planning a merger between Nissan and Renault. However, Nissan’s executives opposed the deal, the Financial Times reported. Ghosn’s objective behind the merger was to make “the partnership ‘irreversible.’”َ”A merger was likely to happen ‘within months,’” said a source close to Nissan board quoted in the British newspaper. read more