TOKYO -- Nissan Motor Co. is poised to demand the payment of damages from its former Chairman Carlos Ghosn for what the major automaker claims was illicit use of company funds, people familiar with the move said.
Ghosn has been indicted over the alleged underreporting of his remuneration and transfer of personal investment losses to the company, although he vehemently denies the charges of violating the Financial Instruments and Exchange Act and the Companies Act.
The Nissan move to seek damages payments is part of the major automaker's efforts to uncover what Nissan officials think was abuse of the company by the former chairman, those people said. An internal probe has found that Ghosn committed a number of illicit activities, they added, including a questionable business contract he signed with his elder sister.
According to those individuals, Nissan sent a letter under Ghosn's name to his sister in March 2003, that said the automaker had set up a "global donations advisory council" and wanted to sign a contract with her as the panel's only adviser and member. From 2003 through 2016, the company paid a total of 755,000 dollars (about 82 million yen) to the woman.
However, such a council never existed, and there is no record of Ghosn's sister doing work for Nissan, those people said. Nissan rules require approval from the board of directors for a board member to hire a family member, but this step was not taken for this arrangement with the former chairman's sibling.
Moreover, it has been revealed that Nissan funds were used at the instruction of Ghosn and others for the purchase and renovation of expensive houses overseas through subsidiaries abroad, donations to universities, and the payment of yacht club membership fees. Nissan has decided that these payments caused damage to the company and intends to demand repayment from Ghosn.
In November last year, Nissan removed Ghosn as its chairman based on the results of its internal probe. The company has since continued and expanded its investigation into other parts of the world, including remittances to his acquaintances in the Middle East. Nissan is trying to get a full picture of what it considers the former chairman's wrongdoings, and announce the results of its survey.
(Japanese original by Naoya Matsumoto, Business News Department)