Carlos Ghosn, former chairman of Nissan Motor Co., allegedly asked an acquaintance in Saudi Arabia to pay about 3 billion yen to guarantee a huge loss incurred by his private investment, The Yomiuri Shimbun has learned.
According to sources close to the case, Ghosn had about 1.6 billion yen transferred to the acquaintance from secret funds of the automaker. The special investigation squad of the Tokyo District Public Prosecutors Office now believes that the about 1.6 billion yen was possibly allocated to reimburse the guarantee fees paid by the acquaintance, the sources said.
Ghosn, 64, has been rearrested on suspicion of aggravated breach of trust under the Companies Law, involving the misappropriation of Nissan funds for personal use.
In October 2008, when Ghosn was Nissan's representative director and chief executive officer, he suffered private appraisal losses worth about 1.85 billion yen through a swap transaction contracted to Tokyo-based Shinsei Bank, according to the sources.
Following this, he allegedly replaced his own asset management company with Nissan as the party that had signed the contract with the bank, thereby shifting the losses to the automaker.
From 2009 to 2012, he is also believed to have had 14.7 million dollars (about 1.6 billion yen at the current exchange rate) in total sent from secret reserves managed by Nissan Middle East FZE -- a Nissan subsidiary based in the United Arab Emirates -- to the acquaintance in Saudi Arabia. These acts of suspected misconduct brought about Ghosn's latest rearrest, allegedly for causing damage to Nissan.
According to the sources, the Securities and Exchange Surveillance Commission saw his conduct as problematic, and Ghosn allegedly again made his asset management company a party signed to the contract around February 2009.
However, by doing so, Ghosn was required by Shinsei Bank to provide additional collateral. If he failed to do so, it was feared that the appraisal losses would have been confirmed as huge losses, the sources said.
Ghosn then asked the acquaintance in Saudi Arabia, a property owner whom Ghosn has known for three decades, to cooperate in his bid to obtain a credit guarantee, according to the sources.
The acquaintance is believed to have paid about 3 billion yen as guarantee fees to a foreign-affiliated bank. Subsequently, the bank issued a letter of credit to Shinsei Bank to guarantee Ghosn's debts. As a result, Ghosn did not have to provide any additional collateral, the sources said.
From June 2009 to March 2012, Ghosn allegedly ordered Nissan Middle East FZE to transfer a total of about 1.6 billion yen from the secret reserves called CEO reserves managed by the subsidiary to a company run by the acquaintance. The transfer was made on four occasions.
Although the money was transferred on the pretext of sales promotion, among other such purposes, the acquaintance's firm was not engaged in promotional activities.
The special investigation squad suspects that the about 1.6 billion yen provided to the acquaintance's company was used to cover the guarantee fees and is investigating the flow of money.
According to his lawyer, Ghosn admitted he had provided the money to the acquaintance, but denied the allegation by the prosecutors.
The money was paid in return for the acquaintance's efforts in cooperation in resolving trouble between Nissan and a Saudi car dealership and lobbying activities for the Saudi government, Ghosn said, according to his lawyer.
Ghosn also insisted that the acquaintance's efforts and cooperation were a known fact among Nissan workers in the Middle East, and thus he could not understand why the money transfer was considered a breach of trust, according to his lawyer.
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