Nissan Motor Co. Chairman Carlos Ghosn is suspected of having Nissan-connected companies in Brazil and Lebanon purchase expensive homes there and allowing his family and others to live in them, according to sources.
Ghosn has been arrested on suspicion of falsifying his remuneration on Nissan Motor's securities reports.
A total of about 2.1 billion yen (18.6 million dollars) was allegedly used to purchase the homes and renovate one of them. The special investigation squad of the Tokyo District Public Prosecutors Office considers the 2.1 billion yen to be part of Ghosn's remuneration that was not specified in the securities reports, the sources said.
Born in Brazil, the now 64-year-old Ghosn lived in Lebanon from his childhood through high school, and has strong ties to those countries. Nissan has a factory in Rio de Janeiro, and Ghosn acted as a torchbearer at the 2016 Rio Olympics.
Ghosn wrote in his autobiography that he never forgets he is Brazilian, and that Rio de Janeiro may be the place where he can return to his true self. At the same time, Lebanese culture and history are also important.
According to sources, a Nissan subsidiary established for investment purposes in the Netherlands set up local companies in Brazil and Lebanon.
The companies purchased expensive homes in Rio de Janeiro and Beirut in 2011 and 2012.
The home in Rio de Janeiro allegedly cost about 600 million yen, while the purchase and renovation of another home in Beirut cost about 1.5 billion yen. Both the local companies are believed to be paper companies.
The funds to buy the homes and renovate one of them were provided by the Nissan Motor parent company, ostensibly for investment purposes through the subsidiary, but Ghosn let family members live in the homes, which means he used them for private purposes.
However, the cost of purchasing and maintaining the homes, and renovating one of them, was not specified in the securities reports as remuneration for Ghosn.
In the reports, Ghosn's remuneration was given as 987 million yen for the business period ending March 2012 and 988 million yen for the business period ending March 2013.
Ghosn was arrested for allegedly understating his remuneration by about 5 billion yen over a five-year period through the business period ending March 2015, in collusion with Greg Kelly, 62, representative director of Nissan. The special investigation squad believes that about 2.1 billion yen of that figure was spent to purchase the homes and for other purposes.
Sources said Kelly, who received instructions from Ghosn, allegedly ordered multiple executive officers at Nissan to go ahead with procedures to purchase the homes.
Kelly is one of the three representative directors at Nissan. A company source said Kelly, who lives in the United States, rarely came to Japan and it is unclear what he did at the company. Kelly expressed his opinions via teleconference at board meetings, and had strong influence mainly over personnel matters among executives, the source said.
At a press conference on Monday, Nissan President and Chief Executive Officer Hiroto Saikawa said, "He [Kelly] has controlled the company against the background of Ghosn's power."
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