KYODO NEWS - Dec 10, 2018 - 15:10 | Urgent, All, Japan

Former Nissan Motor Co. Chairman Carlos Ghosn, his close aide Greg Kelly and the Japanese automaker were indicted Monday over an alleged underreporting of about 5 billion yen ($44.5 million) of Ghosn's remuneration in the company's financial statements during the five years through March 2015.

Ghosn and Kelly were also served fresh arrest warrants the same day for continuing the misconduct through March 2018, a move which may lead to up to an additional 20 days of detention through Dec. 30 and sparking further criticism from overseas over what is viewed as harsh treatment of the once-admired businessman.

Ghosn, 64, who is credited with having rescued Nissan from near-bankruptcy in the 1990s, was arrested by prosecutors on Nov. 19 on a charge of violating a financial law by making misstatements in the reports for the five fiscal years from fiscal 2010.

Kelly, a 62-year-old former Nissan representative director, was also arrested along with Ghosn for conspiracy.

Japanese law sets detention limits for a suspect of 22 days for an arrest warrant served by prosecutors. The deadline for the two executives' initial detention period is Monday, but a fresh arrest warrant would allow the prosecutors to keep them in custody at a Tokyo detention center for a longer period and conduct further interrogation.

In total, Ghosn is suspected of having failed to report around 9 billion yen of his pay.

Japan's securities watchdog, meanwhile on Monday, filed a criminal complaint against Ghosn, Kelly and Nissan over the 5 billion yen of underreporting.

The detention of Ghosn and Kelly and their prolonged interrogation without the presence of a lawyer have sparked some criticism outside Japan.

While visits by people from outside the detention center are restricted, lawyers and embassy officials are allowed to meet them.

Ghosn and Kelly have admitted to the prosecutors that the former chairman's remuneration was not entirely stated in the reports, but have claimed that it was not necessary to do so because how much he would receive after his retirement had yet to be settled, according to sources with knowledge of the investigation.

The prosecutors believe the payments were fixed as they have obtained documents on his post-retirement compensation signed by Ghosn.

Nissan CEO Hiroto Saikawa was also found to have signed documents on post-retirement payments crafted by Kelly. The prosecutors have questioned Saikawa on a voluntary basis, believing he knows why and how they were created.

Ghosn has told the prosecutors he did not report the full amount because he did not want company workers to become unmotivated after learning about his high pay package, according to the sources.</s>Carlos Ghosn, the powerful auto executive who recently lost his role as chairman of Nissan, has been formally indicted on charges that he underreported his income to Japanese authorities.

The Nissan Motor Co. as well as a top aide to Ghosn also were indicted, accused of assisting in the financial misconduct, state broadcaster NHK reports.

Ghosn, who was arrested and ousted as chairman after the allegations were made last month, was detained without charges for 22 days — the maximum length allowed under Japanese law.

But he's not tasting freedom yet. In addition to indicting him on Monday, authorities also served him a fresh arrest warrant, based on their belief that Ghosn's alleged fraud lasted longer than originally believed.

That will allow authorities to detain and interrogate Ghosn for three more weeks, Kyodo News Agency reports.

Ghosn was a titan in the automobile industry. He was venerated for orchestrating a remarkable turnaround at Nissan, which was edging near bankruptcy when he took the reins. And he simultaneously led Nissan, Renault and Mitsubishi, arranging the three companies into a powerful, successful alliance.

Mitsubishi removed Ghosn from his post as chairman after his arrest. But his future at Renault is not yet clear.

The case has brought international scrutiny to Japan's judicial system, which has a conviction rate of more than 99 percent after indictment.

France 24 spoke to lawyer and former prosecutor Nobuo Gohara about the factors driving that astonishing figure.

" Few judges are willing to deliver an innocent verdict. And this has led to some false convictions," he said. "The biggest problem is the so-called hostage-based criminal justice system. Suspects who insist on their innocence tend to remain in custody for a long time. This is linked to Japan's high confession rate, and the assumption that a suspect who denies wrongdoing deserves to suffer disadvantage."

Even a high-profile scandal involving prosecutors caught tampering with evidence has not led to real reforms, Gohara says.

Last month, The Wall Street Journal published an editorial saying Ghosn's arrest "ought to trouble anyone concerned with due process and corporate governance in Japan."

The Journal asked why Nissan wasn't aware of the alleged financial misconduct earlier, why the "publicly available facts" are so opaque, and why this case is being handled much more aggressively than recent accounting scandals at Toshiba and Olympus.

Both the Journal and Gohara also criticized the Japanese media, which regularly publishes leaked details about alleged criminal behavior, and has continued to do so in Ghosn's case.</s>TOKYO – Japanese media reported Monday that prosecutors have added to charges against Nissan’s former chairman Carlos Ghosn, extending his detention following his arrest on Nov. 19.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn and another Nissan executive, Greg Kelly. A commission official said Monday that Nissan, Ghosn and Kelly were suspected of falsifying millions of dollars’ worth of Ghosn’s income. In Japan, a company can be charged with wrongdoing.

The prosecutors say Ghosn is suspected of underreporting his income by 5 billion yen ($44 million) over five years. The allegations newly reported on Monday would increase that amount by 4 billion yen ($36 million).

Some kind of action by the prosecutors had been expected because the detention period allowed for allegations disclosed earlier was to end on Monday.

More: Board of Japanese automaker Nissan fires Carlos Ghosn as chairman

More: Mitsubishi Motors fires Carlos Ghosn as chairman following arrest

Kelly, 62, is suspected of having collaborated with Ghosn. Kelly’s attorney in the U.S. says he is asserting his innocence.

Both men were dismissed from their managerial roles at Nissan following their arrests.

Ghosn was sent to Nissan by its partner Renault SA of France in 1999. He led a dramatic turnaround the near-bankrupt Japanese automaker. But Ghosn’s star-level pay has drawn attention since executives in Japan tend to be paid far less than their international counterparts.

Only Ghosn’s attorneys and embassy officials from Lebanon, France and Brazil, where he has citizenship, have been allowed to visit him.

More: Nissan's Carlos Ghosn reportedly used car maker's money to buy personal homes, pay sister</s>Carlos Ghosn, who was fired last month as chairman of Nissan Motor Co., a close aide and Nissan itself were indicted Monday and accused of concealing as much as $45 million in Ghosn's income and using Nissan funds to buy personal homes abroad, the Japanese news agency Kyodo reported.

Ghosn (pronounced "Gohn"), who is already in jail in Tokyo in connection with the case, could face up to 10 years in prison if he is convicted.

The formal charges came the same day Ghosn and his former chief of staff, Greg Kelly, would have had to have been released after 22 days of detention had they not been charged or arrested under a new warrant, Kyodo reported.

Ghosn and Kelly were fired last month after Nissan said an internal investigation, prompted by a whistleblower, had found serious misconduct; they were arrested Nov. 19 on suspicion of having failed to report all of their income over five years.

Nissan said at the time that "numerous other significant acts of misconduct have been uncovered — such as personal use of company assets — and Kelly's deep involvement has also been confirmed."

Ghosn and Kelly have admitted to prosecutors that Ghosn's pay wasn't fully reported, but they claimed that it didn't have to be because it could have been recorded as compensation after his retirement, Kyodo reported, citing sources with knowledge of the investigation.

Ghosn has been credited with rescuing Nissan from near-bankruptcy in 1999, when Groupe Renault bought a stake in Nissan and installed Ghosn to turn it around after it had run up massive amounts of debt.

Nissan quickly recovered under his leadership, and Ghosn was soon elevated to chief executive not only of Nissan but also of the parent Renault-Nissan Alliance, making him a superstar in the automotive world.</s>TOKYO—Japanese prosecutors on Monday indicted former Nissan Motor Co. Chairman Carlos Ghosn on charges of underreporting his compensation on five years of Nissan’s financial reports, Kyodo News reported.

In addition, Nissan as a company was indicted over the same charges, Kyodo said. A Nissan representative declined to comment.</s>Monday morning Japanese prosecutors issued fresh indictments for Carlos Ghosn and his close aide Greg Kelly. However, it wasn't just the duo who masterminded the underreporting of Ghosn's income that got indicted, but prosecutors have also announced an indictment against the corporate entity of Nissan Motor Co, according to Fortune.

While already jailed on previous charges, Ghosn and Kelly were reportedly re-arrested, this time formally charged with additional counts of financial misconduct alongside their employer. Newest charges allege an additional $38 million (4.2 billion JPY) in underreported income from 2015 until 2018, a number which joins the original accusation of $44 million (5 billion yen) in fraudulently obtained income from 2010 until 2015.

Nissan confirmed its indictment, by issuing a statement parallel to the charges levied against the corporation.

“Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret,” said Nissan, “Nissan will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”

Since his initial arrest in mid-November, Nissan has ousted Ghosn as board chairman, a decision which was swiftly matched by Mitsubishi. The remaining alliance partner, Renault, declined to dethrone Ghosn.

According to reports, Ghosn planned to bring a proposal to Nissan's board which would end the former-CEO's hiatus from being Nissan's management team, effectively overthrowing current CEO Hiroto Saikawa. However, his plans were foiled after tips from a whistleblower resulted in Nissan's investigation, and ultimately Ghosn's arrest.

Over a length spanning nearly nine years, a total figure of $82 million was not reported by Ghosn, who allegedly hid the income by instructing Kelly to circulate memos internally rather than formally report the income on Nissan's financial statements. The income when then funneled through a series of Nissan-established entities staged in tax haven countries and poured into houses and condos around the world.

If convicted, Ghosn and Kelly could face up to 10 years in prison, a fine of up to $89,000 (10 million JPY), or potentially both. Nissan faces a fine of up to $6.2 million (700 million JPY).</s>Prosecutors have charged Nissan’s former chairman Carlos Ghosn, another executive and the automaker itself for allegedly violating financial laws by underreporting income.

The charges imposed Monday involve allegations Ghosn’s pay was underreported by about 5 billion yen (US$44 million) in 2011 through 2015.

The prosecutors said earlier the allegations were the reason for Ghosn’s arrest on Nov. 19.

The arrest of an industry icon admired both in Japan and around the world has stunned many and raised concerns over the Japanese automaker and the future of its alliance with French carmaker Renault.

The prosecutors issued statements Monday outlining new allegations against Ghosn and Greg Kelly, the other executive. Those are of underreporting another 4 billion yen (US$36 million) in 2016 through 2018. Nissan as a company was not mentioned in the latest allegations, which did not give details about the income thought to have been underreported.

In Japan, a company can be charged with wrongdoing. A court date is still undecided as the prosecutors continue to question Ghosn and Kelly.

The maximum penalty for violating Japan’s financial laws, as the prosecutors allege, is 10 years in prison, a 10-million-yen (US$89,000) fine, or both.

Some kind of action by the prosecutors had been expected because the detention period allowed for the allegations disclosed earlier was to end on Monday.

Nissan confirmed the charges against it in a statement and vowed to strengthen its governance and compliance.

“Nissan takes this situation extremely seriously,” it said. “Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret.”

Kelly, 62, an American, is suspected of having collaborated with Ghosn.

Kelly’s attorney in the U.S., Aubrey Harwell, told The Associated Press earlier this month that his client is asserting his innocence. He said insiders at Nissan and outside experts had said the handling of the income reporting was legal.

Ghosn was ousted as Nissan chairman and Kelly lost his representative director title following their arrests. They both remain on Nissan’s board pending a shareholder’s meeting.

Ghosn, 64, was sent to Nissan by its partner Renault SA of France in 1999. He led a dramatic turnaround of the near-bankrupt Japanese automaker. But his star-level compensation drew attention since executives in Japan tend to be paid far less than their international counterparts.

Japanese Prime Minister Shinzo Abe told a news conference Monday that relations between Japan and France are unshakable despite concerns over the future of Nissan’s alliance with Renault after Ghosn’s indictment.

“It is important to maintain stability in the Nissan-Renault-Mitsubishi alliance, which is a symbol of industrial co-operation between Japan and France,” he told a televised news conference Monday, adding that Japan will promote improved corporate governance in line with global standards.

It is typical in the Japanese legal system for there to be little access to comment by suspects. Prosecutors have also said little.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn, Nissan and Kelly, paving the way for the prosecutors to charge them. A commission official said Monday that Nissan, Ghosn and Kelly were suspected of falsifying reports on millions of dollars’ worth of Ghosn’s income.

Nissan has said that an internal investigation found three types of misconduct: underreporting income to financial authorities, using investment funds for personal gain and illicit use of company expenses.</s>Former Nissan chairman Carlos Ghosn, another executive and the carmaker itself have been charged by prosecutors in Tokyo with under-reporting income.

The charges imposed on Monday involve allegations Ghosn’s pay was under-reported by about five billion yen (£34 million) over five years.

The prosecutors had said earlier that the allegations were behind Ghosn’s November 19 arrest.

They added a new set of allegations on Monday against Ghosn and another executive, Greg Kelly, of under-reporting another four billion yen (£28 million) for more recent years.

Nissan as a company was not mentioned in the latest allegations.

In Japan, a company can be charged with wrongdoing.

Some kind of action by the prosecutors had been expected because the detention period allowed for the allegations disclosed earlier was to end on Monday.

Kelly, 62, is suspected of having collaborated with Ghosn.

Kelly’s lawyer in the US said he is asserting his innocence.

He has been ousted as Nissan chairman and Kelly lost his representative director title following their arrests, but they both remain on the board.

Ghosn, 64, was sent to Nissan by its partner Renault SA of France in 1999 and led a dramatic turnaround of the near-bankrupt Japanese carmaker.

But Ghosn’s star-level pay drew attention since executives in Japan tend to be paid far less than their international counterparts.

Only Ghosn’s lawyers and embassy officials from Lebanon, France and Brazil, where he has citizenship, have been allowed to visit him.

Nissan said in a statement: “Nissan takes this situation extremely seriously. Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret.”

The statement said Nissan would work to improve its corporate governance and compliance, “including making accurate disclosures of corporate information”.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn, Nissan and Kelly.

A commission official said on Monday that Nissan, Ghosn and Kelly were suspected of falsifying reports on millions of dollars’ worth of Ghosn’s income.</s>TOKYO (Reuters) - Tokyo prosecutors indicted Nissan Motor along with its ousted Chairman Carlos Ghosn, domestic media reported on Monday, shifting the focus of the financial misconduct scandal to the Japanese automaker and its CEO's responsibility.

Ghosn was arrested on Nov. 19 on suspicion of conspiring to understate his compensation by about half of the actual 10 billion yen ($88 million) over five years from 2010.

Nissan, which fired Ghosn as chairman a few days later, has said the misconduct was masterminded by the once-celebrated executive with the help of former Representative Director Greg Kelly, who was indicted along with Ghosn, according to the reports.

Nissan itself was indicted on Monday for making false statements in annual reports, they said.

Tokyo authorities also plan to re-arrest the two executives, sources said, declining to be named as they were not authorized to speak with media. Media reports have said the fresh crime was for three additional years of under-reported income. The two would then remain in custody without bail.

The Tokyo prosecutors' office said it could not comment. Nissan said earlier that it was cooperating with the prosecutors' office and providing them with information related to misconducts.

A separate source said there were concerns running through the company that Chief Executive Hiroto Saikawa and others may also be indicted.

Analysts have said it could be difficult for Nissan to avoid blame, whether it turns out that other executives had knowledge of Ghosn's misconduct, or that the company lacked adequate internal controls.

"Normally, if it's falsifying the financial filings, the company as well as the perpetrator is charged. That's not surprising. It's to be expected," said prominent lawyer and former prosecutor Nobuo Gohara.

"Now suddenly the issue of CEO Saikawa becomes bigger. It becomes difficult to overlook Saikawa's role in all of this. That becomes the main focus now."

Ghosn and Kelly have not made any statement through their lawyers, but Japanese media reported that they have denied the allegations. Calls to Ghosn's lawyer, Motonari Otsuru, at his office went unanswered.</s>The Latest: Nissan says taking charges against it seriously

TOKYO (AP) — The Latest on charges against former Nissan Motor Co. chairman Carlos Ghosn following his arrest on suspicion of underreporting income (all times local):

Nissan Motor Co. says in a statement that it is taking "extremely seriously" charges made against it, its former chairman Carlos Ghosn and another executive.

The automaker issued the statement Monday after it, Ghosn and Greg Kelly were indicted on charges of violating the Japan Financial Instruments and Exchange Act, by allegedly making false disclosures in annual securities reports.

It said, "Nissan takes this situation extremely seriously. Making false disclosures in annual securities reports greatly harms the integrity of Nissan's public disclosures in the securities markets, and the company expresses its deepest regret."

The statement said Nissan would work to improve its corporate governance and compliance, "including making accurate disclosures of corporate information."

Tokyo prosecutors charged Nissan's former chairman Carlos Ghosn, another executive and the automaker itself with underreporting income.

The charges imposed Monday involve allegations Ghosn's pay was underreported by about 5 billion yen ($44 million) over five years. The prosecutors had said earlier that the allegations were behind Ghosn's Nov. 19 arrest.

The prosecutors added a new set of allegations Monday against Ghosn and Greg Kelly, the other executive, of underreporting another 4 billion yen ($36 million) for more recent years. Nissan as a company was not mentioned in the latest allegations.

In Japan, a company can be charged with wrongdoing.

Japanese media say prosecutors have added to charges against Nissan's former chairman Carlos Ghosn, extending his detention following his arrest on Nov. 19.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn and another Nissan executive, Greg Kelly.

A commission official said Monday that Nissan, Ghosn and Kelly were suspected of falsifying millions of dollars' worth of Ghosn's income. In Japan, a company can be charged with wrongdoing.

Kyodo News Service and other Japanese media reported Monday that prosecutors added more allegations of underreported income. The fresh allegations allow them to extend the period of Ghosn's detention.

Some kind of action by the prosecutors had been expected as the detention period allowed for the allegations disclosed earlier ends on Monday.

Japanese media say Tokyo prosecutors have charged Nissan former chairman Carlos Ghosn with underreporting his income. Another executive and Nissan Motor Co. also were charged.

Prosecutors would not immediately confirm the reports Monday by Kyodo News service and other media. They were due to brief media later in the day.

The prosecutors say Ghosn is suspected of underreporting his income by 5 billion yen ($44 million) over five years. In Japan, a company can be charged with wrongdoing.

Some kind of action by the prosecutors had been expected as the detention period allowed for the allegations disclosed so far ends on Monday.

Nissan executive Greg Kelly is suspected of having collaborated with Ghosn. Kelly's attorney in the U.S. says he is asserting his innocence.
Nissan, the company's former chairman Carlos Ghosn, and an aide are indicted on charges that Ghosn underreported about ¥5 billion ($44.5 million) of his income. Ghosn's arrest warrant is renewed.