Ghosn scandal to cost Nissan £65m as firm warns on profits

CARS giant Nissan took a £65 million hit from the Carlos Ghosn scandal today as profits crashed to a six-year low.

The Japanese company, already suffering from a sluggish global car market, booked a one-off 9.2 billion yen (£64.7 million) charge for “mis-stated compensation” it estimated was paid to Ghosn between 2009 and 2017.

The company said the figure is a “best estimate” of unbooked expenses made to the 64-year-old, which range from 1.7 billion yen in 2017 to 246 million yen in 2009, and the final amount may differ once an internal investigation concludes.

Ghosn, the former Nissan chairman, has been detained in Tokyo since November charged with understating his income at the cars giant. He denies the payments were illegal. Nissan, which posted its first results without Ghosn today, slashed operating profit targets for the year ending March 2019 to 450 billion yen, versus estimates of 540 billion yen.

Car sales expectations were also cut to 5.6 million from 5.9 million due to a big drop in China, where sales growth is expected to go into reverse

Full-year revenue is expected to fall by 400 million yen to 11.6 billion yen.

Retail sales were particularly hard hit in the US and Europe this year.

American volumes of cars like the Rogue and New Altima fell 8.4% while European volumes crashed 13.2% and its market share also nudged lower.

Multi-millionaire Ghosn, the key figure in a strategic alliance between Nissan and Renault, was ousted as Nissan chairman after the allegations surfaced.

Renault owns 43% of Nissan shares, prompting fear in Japan the French firm held too much power in the partnership. Reports suggested he had been planning to orchestrate a full-blown merger between Nissan and Renault.

Politicians from both countries, including Japanese prime minister Shinzo Abe, have maintained that the alliance must continue despite Ghosn’s arrest.

The Japanese car giant is a major employer in the UK with its plant in Sunderland.

Last week the firm controversially scrapped plans to build the new X-Trail SUV in t h e U K b e c a u s e o f B rex i t uncertainty.

The move prompted political ire after it emerged the Government has promised to support Nissan in the wake of the Brexit deal with up to £80 million to build new models in the UK.

Retail sales were particularly hard hit in the US and Europe this year