Please view the main text area of the page by skipping the main menu.

Prosecutors question Nissan president over Ghosn's alleged salary underreporting

Nissan Motor Co. President Hiroto Saikawa speaks to reporters at a news conference in Yokohama's Nishi Ward, on Nov. 19, 2018. (Mainichi/Toshiki Miyama)

TOKYO -- Prosecutors here questioned Nissan Motor Co. President Hiroto Saikawa and director Toshiyuki Shiga on a voluntary basis concerning the arrest of company chairman Carlos Ghosn over the underreporting of his salaries in financial statements, according to people familiar with the matter.

The special investigation unit of the Tokyo District Public Prosecutors Office is considering slapping criminal charges against the major carmaker over the Ghosn case because the income the elite businessman allegedly avoided reporting to authorities stands at some 5 billion yen. Prosecutors believe that Nissan as a corporation should also face criminal responsibility over the scandal.

Prosecutors apparently questioned Saikawa and Shiga about the background of the underreporting case, as well as their awareness of the chairman's suspected wrongdoings.

Ghosn and Nissan representative director Greg Kelly, 62, were arrested on suspicion of submitting falsified financial statements to the Kanto Local Finance Bureau for the five-year period between fiscal 2011 and 2015. While the actual amount Ghosn received totaled some 9.998 billion yen, the figure listed in the statements was only about 4.987 billion yen. The Tokyo District Court on Nov. 21 approved the detention of Ghosn and Kelly for 10 days until Nov. 30.

Kelly, Ghosn's close aide, allegedly instructed executive officers and others under him to falsify the reports. Shiga was chief operating officer and deputy chairman during the period Ghosn allegedly underreported the funds he received.

The average annual remuneration Ghosn allegedly hid from the authorities was about 1 billion yen, which a senior prosecution official described as "extremely substantial." Corporate board members are legally required to submit their names and salaries in their companies' financial statements when their annual salaries are 100 million yen or more.

The Financial Instruments and Exchange Act, which Ghosn and Kelly are suspected of violating, provides for up to 10 years in prison or a fine of up to 10 million yen for false reporting. The corporations to which those offenders belong are also subjected to a fine of up to 700 million yen.

In the past, criminal cases based on the act mostly concerned corporate window-dressing scandals. In those cases, false financial statements were often prepared to hide corporate debts by listing nonexistent profits. It is extremely rare for law enforcement authorities to apply the law to a case where board member pay was underreported.

Also in The Mainichi

The Mainichi on social media

Trending