Nissan’s profit drops amid former chair Ghosn’s arrest

Nissan lowered its profit forecast for the full year on Tuesday, partly due to special charges related to alleged false financial reporting by its former chairman, Carlos Ghosn.

Nissan Motor Co’s profit in the October-December quarter was 70.4 billion yen ($637 million), down from 301.6 billion yen the previous year. Quarterly sales grew 6 percent to 3.05 trillion yen ($27.5 billion).

The main factor behind the sharp weakening in profit for the fiscal third quarter was the absence of a lift from US tax reforms that sharply boosted Nissan’s earnings in late 2017.

The maker of the Leaf electric vehicle, X-Trail sport utility vehicle and Infiniti luxury models cut its profit forecast for the fiscal year through March to 410 billion yen ($3.7 billion), down 45 percent on year. The previous projection was for a 500 billion yen ($4.5 billion) profit.

The company said the main reason for the downgrade was faltering sales in China and the US.

But it also logged about 9.2 billion yen ($83 million) in costs related to the alleged false underreporting of Ghosn’s compensation, according to Nissan.

Ghosn has been detained without bail since Nov 19. Besides falsifying financial reports, he has been charged with breach of trust related to his handling of investment losses and payments to a Saudi businessman. Ghosn has said the payments were for legitimate services and Nissan didn’t suffer losses.

He has said he is innocent of any wrongdoing and is the target of a conspiracy to oust him from the company he helped turn around when it was on the brink of bankruptcy 20 years ago. (AP)