Ghosn, Kelly and Nissan Indicted in Japan

December 10, 2018 at 10:50 AM

Prosecutors in Japan have indicted former Nissan Motor Co. Chairman Carlos Ghosn, board member Greg Kelly and the company itself for grossly understanding Ghosn’s compensation for five years.

Authorities also re-arrested Ghosn and Kelly on new charges of doing the same for three more years. The maneuver imprisons the two men for as many as 20 more days and prevents them from being released on bail.

Prosecutors have repeated the same steps to incarcerate previous suspects for as long as a year or more, in part to encourage them to confess. Media reports say prosecutors in Japan rarely take on cases they aren’t confident of winning and had a 99% conviction rate last year.

Today’s indictment states that Ghosn understated his compensation by 4.8 billion yen ($43 million) during fiscal 2010-2014. The new charges say he did the same in fiscal 2015-2017 to hide another 4.2 billion yen ($37 million). Nissan’s internal probe calculated the same total over the nine-year period.

If found guilty, Ghosn and Kelly each could be imprisoned for as long as 10 years, fined as much as 10 million yen ($88,600), or both, according to The Nikkei. The company faces a fine as great as 700 million yen ($6.2 million).

Nissan has acknowledged the reporting discrepancy. It has contends that deferred compensation didn’t need to be reported because the amounts weren’t known. Prosecutors argue that Nissan should have reported an estimated amount as a future liability.

Today’s indictments made no mention of earlier media reports that Ghosn also is suspected to misusing corporate funds to acquire luxury homes for his use in several countries. It’s possible those charges could be leveled later to keep him in jail.