Ghosn used company money for private events: Nissan

Kyodo News

Posted at Jan 16 2020 10:42 PM

Nissan Motor Co. said Thursday that former Chairman Carlos Ghosn used company funds for private events abroad, including a party held at the Palace of Versailles and paying for guests to attend the Carnival in Rio de Janeiro.

Nissan said in a corporate governance report submitted to the Tokyo Stock Exchange that its joint venture with Renault SA disbursed at least 3.9 million euros ($4.35 million) as "personal expenses of Mr. Ghosn and unrelated to the (venture's) corporate purposes."

The report came after the former boss fled Japan to Lebanon while on bail late last month. The former chairman and CEO at Nissan and Renault has slammed the Japanese automaker for staging a coup to take him down and criticized its internal investigation as being biased.

The joint venture in the Netherlands, Renault-Nissan B.V., also paid for Ghosn's dinners at the Marmottan Museum in Paris, gifts purchased at luxury jewelry store Cartier and attorney fees for a law firm in Lebanon, a country where Nissan conducted little business, Nissan said.

Donations of around 2.37 million euros to 10 institutions, mostly in Lebanon made by the Dutch company RNBV in the name of Ghosn between 2009 and 2018 are "highly likely" to be "unrelated to RNBV's business," the report said.

Ghosn also used corporate aircraft for personal purposes and the cost of these flights was a minimum of 3.1 million euros, said the report, citing a joint investigation by Nissan and Renault.

Nissan's own probe, meanwhile, has found that Zi-A Capital B.V., its wholly owned subsidiary in the Netherlands, purchased residences in Rio de Janeiro and Beirut for Ghosn and covered renovation costs, with outlays totaling over $22 million.

The report also outlined misconduct committed by executives other than Ghosn, including excessive salary paid to Ghosn's successor as CEO Hiroto Saikawa, who resigned in September last year from the post.

The report found Saikawa received an excess of around 96.50 million yen ($877,000) before tax via stock appreciation rights, and six other executives were overpaid under the scheme by a total of 57.72 million yen. Nissan expects the amount to be repaid by March.

Nissan said it has decided that its representative executive officers cannot serve concurrently as executives or employees of Renault, partner Mitsubishi Motors Corp., their subsidiaries or affiliates.

The new rule is in line with a proposal made by a third-party panel set up to improve corporate governance, which said concentration of authority in one person, as had been in the case of Ghosn, could cause conflict of interest.

The Nissan report also said its board had decided to abolish the posts of adviser and consultant, which had been given to retired directors.

"None of these officers are involved in daily operations or the exercise of business judgment or attend management meetings," Nissan said in its Improvement Measures Status Report.

Nissan has decided to punish three people other than Ghosn and Greg Kelly, the former representative director who was arrested for allegedly conspiring with the former chairman, for their involvement in the financial misconduct, the company said without elaborating.

Nissan said the unnamed three had held department head or higher posts and are currently in positions that have a strong influence on the governance of the company.

The TSE has ordered Nissan to improve its internal controls after the carmaker corrected its security reports to restate the remuneration of Ghosn.

The TSE has said the company's misreporting violated bourse rules relating to information that could affect investor decisions.

Tokyo prosecutors charged Ghosn over the underreporting of his remuneration by billions of yen in Nissan's securities reports during the eight years through March 2018 and also for misusing company funds.