NISSAN, GHOSN CHARGED WITH HIDING US$140M
Carmaker fined US$15m while ex-CEO will pay US$1m to settle case
UNITED States securities regulators on Monday charged Japanese carmaker Nissan and its former chief executive officer (CEO) Carlos Ghosn with hiding more than US$140 million (RM585.42 million) in Ghosn’s expected retirement income from investors.
Ghosn would pay US$1 million in fines to settle the matter and would be barred from serving as a corporate executive for 10 years, said the Securities and Exchange Commission (SEC) in a statement.
Nissan will pay a US$15 million fine.
The SEC also charged ex-board member Greg Kelly with aiding in the fraud. He agreed to a US$100,000 fine and a five-year corporate officer ban.
But Ghosn, his former righthand man Kelly, and Nissan neither admitted nor denied the SEC’s allegations.
Attorneys for Ghosn welcomed the deal, saying it allowed him to focus on fighting similar allegations in Japan.
The SEC said Ghosn, 65, working with Kelly and other subordinates, devised ways to disguise large amounts of Ghosn’s compensation.
The machinations allegedly stemmed from a shift in Japanese policy in 2009 that required disclosure of individual director compensation above 100 million yen (RM3.88 million), a little more than US$1 million at the time.
“Ghosn became concerned about criticism that might result in the Japanese and French media if his total compensation became publicly known,” said the SEC.
Ghosn directed subordinates to lobby the Japanese government to rescind the policy.
When that failed, “Ghosn and Nissan subordinates took steps to conceal from public disclosure a substantial portion of Ghosn’s compensation”, said the SEC order.
Ghosn and Kelly allegedly “fraudulently inflated” Ghosn’s pension allowance by more than US$50 million and created a “false disclosure” to disguise the increase, said the SEC in an order.
Subordinates of Ghosn falsely told the company’s chief financial officer that another big set of payments under a long-term incentive plan went to many Nissan employees and not mainly to Ghosn, said the order.
Ghosn also instructed an employee to change the currency in which his pension would be paid.
Under a 2007 compensation agreement, Ghosn was to be paid in yen, but a 2011 clause allowed him to choose whether to be paid in yen or US dollars, resulting in an increase of about US$22 million in retirement payments, said the SEC.
His legal team underscored on Monday that the settlement involved no legal finding against him.
“We are satisfied with the conclusion of this agreement in the United States,” said a statement from his attorneys, noting no court had found that Ghosn committed “punishable acts”.