According to new allegations by the giant Yomiuri newspaper this week, Japanese authorities have determined that former Nissan boss Carlos Ghosn used company money for private use. He denies any impropriety.
This development only serves to boost Nissan’s case that Ghosn diverted corporate funds for personal gain. The newspaper purports that the National Tax Agency has found Ghosn used more than $2 million of Nissan funds for several years to pay consultancy fees of $750,000 to his sister for fictitious tasks, in addition to making donations, with no business purpose, to a university in Lebanon, a country in which Ghosn holds nationality.
The embattled former company chairman was arrested 11 months ago for underreporting his compensation. In initial charges leveled against Ghosn in late 2018, Tokyo prosecutors alleged he conspired to report only half of his compensation during a 5 year period ending in March 2015. His actual compensation totaled to approximately $88 million, but company financial reports said it was $44 million.
Ghosn, 64, amassed net wealth of $120 million while serving as CEO of the Nissan-Renault-Mitsubishi Alliance over a 20 year period. With profits down, Nissan is now struggling and will cut at least 12,500 jobs by March 2023.
“Mr Ghosn denies that anything improper occurred regarding the payments or donations, all of which were paid for the benefit of the company,” a spokesperson said. “The prosecutors’ decision to leak them at this juncture, only days after Mr. Ghosn released court filings focusing on extensive prosecutorial misconduct and previewing his defense case for the first time, is an obvious effort to distract from the failings of their case,” they continued.
Tax authorities also concluded that Nissan failed to pay tax on ¥150 million, or $1.38 million, it had used as business expenditures in the three years prior to March 2014, when Ghosn served as CEO. In response to the undeclared tax, Nissan itself has been hit with penalties of tens of millions of yen.
Last week, Ghosn’s lawyers said in court filings that prosecutors colluded with Nissan and government officials to remove Ghosn to block his efforts to integrate Nissan and Renault SA. To achieve that goal, his legal team said prosecutors illegally took advantage of the new plea bargaining system, and that all charges should be dismissed.
Ghosn could face up to 10 years in prison if found guilty when his trial starts soon.
