Advertisement

Carlos Ghosn team denies 'biased' Nissan's spending claims

Carlos Ghosn
Former Nissan chairman Carlos Ghosn gestures during a news conference at the Lebanese Press Syndicate in Beirut, Lebanon on 8 January. Photo: Mohamed Azakir/Reuters

Lawyers acting for fugitive car executive Carlos Ghosn have hit back at detailed accusations from Nissan (8291.T) alleging misuse of funds and hidden earnings.

Nissan on Thursday filed documents with the Tokyo Stock Exchange setting out the conclusions of a 10,000-hour probe into alleged misconduct by former chairman Ghosn.

“A wide variety of misconducts had been committed over a long period of time,” Nissan said in its report, saying “many people were involved and the misconducts were committed not only in Japan but also in foreign countries.”

Ghosn was arrested in Tokyo in November 2018 and charged with various financial crimes at Nissan. Ghosn denies the charges and on New Year’s Eve fled to Lebanon, claiming the Japanese justice system was rigged against him. Interpol has since issued a ‘red notice’ calling for his return to Japan.

READ MORE: Ghosn denies family involved in escape as arrests made

The charges Ghosn faces related to alleged under reporting on his earnings at Nissan and misuse of company funds. Nissan claimed Thursday Ghosn under-reported his earnings by 12.3bn yen (£85.5m, $112m) between 2009 and 2017.

He is also accused of using $22m of company funds to buy and renovate properties in Brazil and Lebanon, and running up bills of $6m using the company’s private jet for personal use. Nissan said $750,000 was also paid to Ghosn’s sister in “advisory fees”.

“No one in Nissan, except a few particular persons, was aware of this fact,” the company said.

A worker readies a Nissan for exhibit at the 2020 New England Auto Show Press Preview
A worker readies a Nissan for exhibit at the 2020 New England Auto Show press preview at Boston Convention & Exhibition Center on 16 January, in Boston, Massachusetts. Photo: Paul Marotta/Getty Images

Nissan paid millions to other businesses linked to Ghosn on his orders, the company said, without knowing about the personal links.

A separate investigation by Nissan and Renault (RNO.PA) found €3.9m was spent on Ghosn’s “personal expenses”. These included:

  • a party at the Palace of Versaille

  • entertaining guests at the Carnival in Rio de Janeiro and the Cannes Film Festival

  • dinners at Marmottan Museum

  • purchases from Cartier in Paris

  • attorney’s fees for a law firm in Lebanon.

Ghosn is accused of running up bills of €5m using Renault’s corporate jet for personal use.

Nissan said Ghosn was able to do all of the above by concentrating power with allies within the company. As a result, “the checks and balances function of certain administrative departments did not necessarily function effectively with respect to the problem concerning Mr Ghosn’s demands for his personal gain.”

The car manufacturer accused Ghosn allies of falsifying documents linked to compensation. Nissan said it had identified other people involved in misconduct during its probe, including Ghosn’s successor as CEO Hiroto Saikawa. It said six others besides Ghosn had under-reported their earnings.

70th Cannes Film Festival – Screening of the film "L'Amant double" (Amant Double) in competition - Red Carpet Arrivals - Cannes, France. 26/05/2017. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, and his wife Carole pose. Picture taken May 26, 2017.  REUTERS/Jean-Paul Pelissier
Carlos Ghosn and his wife Carole at the Cannes Film Festival in 2017. Photo: Jean-Paul Pelissier/Reuters

Lawyers representing Ghosn hit back at the report on Friday, accusing Nissan of bias.

“This report confirms that Nissan's investigation was biased, lacked integrity and independence and was designed and executed for the predetermined purpose of taking out Carlos Ghosn,” Ghosn’s representatives said in a statement sent to the BBC.

In its filing on Thursday, Nissan insisted its internal investigation was independent.

“Multiple external advisers such as law firms and accounting offices” were involved, the company said, including British law firm Latham & Watkins. The probe reviewed 245,000 documents and involved interviews with 70 witnesses. However, Ghosn and Greg Kelly — another Nissan executive who was arrested in Japan — were not interviewed.

READ MORE: Jet firm says rogue employee helped car tycoon Ghosn escape

Ghosn is a legendary figure within the auto world, credited with helping to turn around failing Nissan in the 2000s. He created an alliance between Renault, Nissan, and Mitsubishi that has helped the trio survive and thrive.

He has argued he was authorised to set his own compensation and use company funds in the way he did.

Ghosn claimed in a press conference in Beirut last week he was a victim of a conspiracy between Nissan executives and Japanese authorities to oust him from the company. Ghosn believes Nissan wanted to oust him in order to get rid of Renault’s influence on the company.

Nissan earlier this week denied it was seeking to end the alliance with Renault, which is a significant shareholder in the business.

“Nissan is in no way considering dissolving the Alliance,” the company said in a brief statement.

READ MORE: Carlos Ghosn rips into Nissan and Japan's legal system comparing his arrest to 'Pearl Harbor'