Daily Management Review

Nissan-Mitsubishi Joint Venture Companies Improperly Gave $9 Million To Ghosn


01/18/2019




The Japanese auto makers Nissan Motor and Mitsubishi Motors said on Friday that a joint venture (JV) between the companies had improperly given Carlos Ghosn $9 million in compensation. This statement raised speculations of a fresh charge of embezzlement being brought against the their ousted chairman.,
 
The Netherlands-based JV of the companies had paid the money to Ghosn without the knowledge of the business unit's two other directors - Hiroto Saikawa, CEO of Nissan Motor and Osamu Masuko, CEO of Mitsubishi Motorm w2hich is the latest twist to the prolonged episode of Ghosn’s fall from grace.
 
It has been about two months that Ghosn was arrested and detained in Tokyo. Since then, he has been charged with under-reporting of his income for eight years while he was the chairman of Nissan till March 2018, and had violated financial regulations by illegally transferring his personal losses to the automaker during the global financial crisis.
 
"That such misconduct also occurred at our affiliate is beyond shocking ... it's sad," Masuko told reporters while talking about the improper payments that were made to Ghosn from the Nissan-Mitsubishi B.V in 2017.
 
While the possibility of a criminal case was reiterated by Mitsubishi lawyer Kei Umebayashi, both Mitsubishi and Nissan said the ways of recovering the amount from Ghosn was being considered by them.
 
"The most likely charge for this would be embezzlement," Umebayashi told reporters at a briefing.
 
Mitsubishi's legal team said that around 5.8 million euros ($6.61 million) in annual pay for his role as managing director was given to Ghosn over April-November 2018, a signing fee of 1.4 million and in incentive that was undisclosed by the JV.
 
Masuko said that the aim of setting up of the unit was to allow for funding of expenses for the partnership which included expenses for consultant fees, joint promotional activities, workspace use and corporate jets.
 
"From the time that the unit was established to when I was told about the payments, I had absolutely no idea that the unit was being used for such payments," Masuko added.
 
No comments were available from Ghosn's lawyer, Motonari Otsuru.
 
The global auto industry has been jolted by the arrest of Ghosn because he is a stalwart in the industry and is credited with the turnaround of Nissan from near bankruptcy about two decades ago. The incident has also brought to the fore front the divisions in the largest auto alliance in the world between Mitsubishi, Nissan and France's Renault SA.
 
In recent days, there has been intense pressure from the French government, the largest shareholders of Renault – on the car maker to remove Ghosn as the CEO and chainman of the company. Despite both Nissan and Mitsubishi removing Ghosn as their chairman after his arrest, Renault has kept him as the CEO and Chairman of the company.
 
About 43 per cent of Nissan is owned by Renault while a 15 per cent non-voting stake in the French care company is owned by Japanese auto maker. In 2016, after Nissan acquired 34 per cent stake in Mitsubishi, the later became a member of the three company alliance.
 
(Source:www.news18.com)






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