Nis­san’s ex­ec­u­tive pay may have topped 3 bil­lion yen cap in 2017

The Myanmar Times - - Business International -

NIS­SAN Mo­tor Co.’s ex­ec­u­tive re­mu­ner­a­tion for fis­cal 2017 may have ex­ceeded the nearly 3 bil­lion-yen-cap set by share­hold­ers, with a large sum go­ing to its ar­rested for­mer chair­man Car­los Ghosn, sources close to the mat­ter said Wed­nes­day.

While only 735 mil­lion yen ($6.5 mil­lion) was stated in the com­pany’s se­cu­ri­ties re­ports as re­mu­ner­a­tion for Ghosn in the year that ended this March, the sources said the pay­ment to the charis­matic boss may have ac­tu­ally been about 2.5 bil­lion yen.

In that case, Nis­san may have paid Ghosn, who is fac­ing al­le­ga­tions of fal­si­fy­ing se­cu­ri­ties re­ports, and other ex­ec­u­tives a to­tal of more than 2.99 bil­lion yen in fis­cal 2017, eclips­ing the cap that was adopted at a gen­eral share­hold­ers’ meet­ing in 2008.

The act could be a “grave breach of trust” to share­hold­ers that could even lead to the delist­ing of the com­pany, some ex­perts say.

Un­der com­pany rules, re­mu­ner­a­tion pay­ments for each ex­ec­u­tive should be de­cided through talks in­volv­ing the chair of the board and rep­re­sen­ta­tive board mem­bers. But the sources be­lieve that Ghosn, the 64-year-old who led the com­pany for nearly 20 years, had ef­fec­tively been de­cid­ing the sum alone.

Ghosn was ar­rested last week by Tokyo pros­e­cu­tors for al­legedly vi­o­lat­ing Ja­pan’s Fi­nan­cial In­stru­ments and Ex­change Act by un­der­re­port­ing his re­mu­ner­a­tion by around 5 bil­lion yen over five years to March 2015, even though he re­ceived some 10 bil­lion yen in the pe­riod. The pros­e­cu­tors are also con­sid­er­ing build­ing a case against him for al­legedly un­der­re­port­ing a fur­ther 3 bil­lion yen in re­mu­ner­a­tion re­ceived over three years from April 2015.

Ghosn has de­nied in­tend­ing to fal­sify the fi­nan­cial state­ments, but ad­mit­ted that he did not in­clude in the doc­u­ments part of the re­mu­ner­a­tion he was set to re­ceive when he re­tires be­cause the “pay­ments have not been set­tled,” ac­cord­ing to the sources.

Ghosn al­legedly be­lieved he should re­ceive some 2 bil­lion yen an­nu­ally as re­mu­ner­a­tion. But he in­structed Greg Kelly, a for­mer Nis­san rep­re­sen­ta­tive di­rec­tor who was ar­rested along with him, for al­leged con­spir­acy, to sub­mit that he earned 1 bil­lion yen a year in se­cu­ri­ties re­ports and was plan­ning to re­ceive the re­main­ing amount af­ter re­tire­ment. The post-re­tire­ment pay­ment that was not re­ported was al­legedly about 8 bil­lion yen over the eight years from fis­cal 2010.

Ac­cord­ing to the sources, Ghosn is ap­par­ently try­ing to ar­gue the va­lid­ity of a pur­ported doc­u­ment that showed Nis­san agreed on the pay­ment, ar­gu­ing that he has not signed it.

Un­der the fi­nan­cial in­stru­ments law, re­mu­ner­a­tion needs to be dis­closed in a se­cu­ri­ties re­port when it is fixed, even if the ac­tual pay­out is planned in the fu­ture. Kelly has de­nied any wrong­do­ing, ac­cord­ing to his fam­ily lawyer in the United States who is of­fer­ing him le­gal ad­vice.

“He ab­so­lutely be­lieves what he did was le­gal. He be­lieves it was ap­pro­pri­ate. He be­lieves it was with com­pany in­ter­est, and he also be­lieves he is not guilty of any crim­i­nal con­duct, be it in Ja­pan or be it in the United States,” Aubrey Har­well, a lawyer in Ten­nessee, told Ky­odo News in a phone in­ter­view.

Har­well also said Kelly “had plans to be with his fam­ily back in the (United) States for Thanks­giv­ing,” but he is now in a “dif­fi­cult sit­u­a­tion” as he is de­tained and be­ing sub­jected to in­ter­ro­ga­tion.

Photo: EPA

Car­los Ghosn, Chair­man and CEO of Re­nault-Nis­san Al­liance at­tends a press con­fer­ence to present the group’s 2010 re­sults, in Boulogne-Bil­lan­court, out­side Paris, France on 10 Feb­ru­ary 2011 (reis­sued 22 Novem­ber 2018).

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