Japan’s authorities have officially charged both Carlos Ghosn and Nissan for under-reporting compensation, with prosecutors also blaming the car maker for the financial misconduct.
Ghosn was arrested on November 19 and remains in a Tokyo jail since then, while authorities have also indicted Representive Director Greg Kelly, who’s also blamed for helping the former Nissan CEO in hiding his true compensation.
Nissan is indicted as a legal entity for its alleged role in the case, with the company confirming the news with a short statement.
“Nissan takes this situation extremely seriously. Making false disclosures in annual securities reports greatly harms the integrity of Nissan’s public disclosures in the securities markets, and the company expresses its deepest regret,” the company said in its statement.
“Nissan will continue its efforts to strengthen its governance and compliance, including making accurate disclosures of corporate information.”
Japanese media report that Ghosn has denied the accusations, as is Greg Kelly. If found guilty, the two men could face up to 10 years in prison and a fine of up to 10 million yen ($88,750). Companies can be fined up to 700 million yen ($6.2 million).
According to analysts and experts who spoke to Reuters, it will be difficult for Nissan and its CEO Hiroto Saikawa to avoid blame, regardless of whether the company lacked internal controls or other executives knew about Ghosn’s misconduct.
Nissan fired Ghosn as Chairman a few days after his arrest, with Mitsubishi following suit. Nissan is expected to announce Ghosn’s successor on December 17, while Renault is the only car maker in the alliance between the three which hasn’t officially fired Ghosn yet.