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November 26, 2018

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Ghosn denies fault, inquiry sped up over merger fears

Nissan’s former chairman Carlos Ghosn has denied allegations of financial misconduct.

The Brazil-born tycoon, who has not spoken publicly since he was arrested last Monday, told prosecutors he did not intend to understate his income on financial reports. Ghosn did not exercise his right to remain silent.

Ghosn was sacked as Nissan chairman last Thursday, a spectacular fall from grace for the once-revered boss whose arrest and dismissal have stunned the business world.

Prosecutors accuse Ghosn and fellow executive Greg Kelly of under-reporting the former chairman’s income by around 5 billion yen (US$44 million).

Kelly also denied the allegations, saying Ghosn’s salaries were paid appropriately.

Nissan formed a “secret” team earlier this year to probe the alleged financial misconduct.

A small team involving Nissan’s board members carried out its internal probe confidentially amid concerns about the possible destruction of evidence by Ghosn.

The company reportedly sped up the inquiry so as to oust Ghosn as officials were increasingly worried about his plan to review the Renault-Nissan capital tie-up.

Ghosn is believed to have planned their full-fledged merger although Nissan officials opposed the move due to concerns over Renault’s level of control. This is despite the fact the Japanese company would have become the dominant player in the alliance.

Nissan wants its money back

Ghosn is being held custody in a Tokyo detention center.

Last Wednesday, prosecutors successfully applied to extend his custody for an additional 10 days as they stepped up their questioning.

Separately, Nissan is considering filing a civil damages suit against Ghosn over his expenses.

The Yokohama-based company plans to sue him if controversial expenses such as costs of providing luxury residences for him in Lebanon are confirmed improper, it said.

Ghosn’s removal is an astonishing turnaround for a titan of the auto sector who revived the Japanese brand and forged an alliance with France’s Renault as well as domestic rival Mitsubishi Motors.

Top executives of the three companies plan to hold a meeting this week, their first gathering since his arrest.

The meeting will be held in the Netherlands with a video conference available for executives who cannot attend.

It had been scheduled before his arrest but executives may discuss the fate of the alliance.

Meanwhile, Mitsubishi is to hold a board meeting, as news reports said the firm plans to fire Ghosn as chairman.




 

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