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Nissan also facing charges over Ghosn

Pedestrians walk past a Nissan showroom in Tokyo. (AP Photo)

TOKYO: Japanese prosecutors plan to indict Nissan Motor Co on Monday following the arrest of its former chairman Carlos Ghosn who allegedly understated his compensation in the automaker’s financial reports, investigative sources said Friday.

The prosecutors believe the company should also be held liable, given that the alleged misconduct by Ghosn continued for a protracted period. Ghosn and his close aide Greg Kelly, who was arrested along with the former chairman last month, are also expected to be indicted.

The two were arrested on Nov 19 on suspicion of violating the Financial Instruments and Exchange Act, for reporting only 5 billion yen ($44 million) of Ghosn’s 10-billion-yen remuneration during the five years from fiscal 2010.

The prosecutors are also expected to serve a fresh arrest warrant on Ghosn for allegedly failing to state a part of his remuneration worth 4 billion yen for three years through this March.

According to sources familiar with the matter, Ghosn has asserted the deferred payments were not fixed and therefore did not have to be included in the financial securities reports. The unreported remuneration was supposed to be paid after his retirement.

An ordinance linked to the financial exchange law says remuneration needs to be disclosed in a securities report when the actual sum of the payment becomes clear, even if the actual payout is planned in the future.

Because the alleged misconduct continued for a long period, Nissan will be charged with breaking the same law under a “dual liability” clause, the sources said. The automaker faces a fine of up to 700 million yen.

Nissan has removed Ghosn, 64, from the post of chairman, with an in-house probe finding he had conducted “serious misconduct” including using company assets for personal purposes. The company also accused Kelly, a 62-year-old former Nissan representative director, of “deep involvement” in the misconduct.

The automaker is considering making public part of the findings of the probe, which it said was triggered by a whistleblower report and carried out over several months, sources with knowledge of the company’s plans said.

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