Former Nissan Chairman May Spend 10 Years in Japan Prison

The tech industry are facing major issues at the moment after the arrest of Chinese tech giant Huawei’s chief financial officer. The auto industry are also facing a similar issue with Nissan’s former chairman who is now the CEO of French automaker, Renault.

Nissan’s Carlos Ghosn Scandal

It was reported a few days ago that the Japanese prosecutors have officially charged the former chairman of Nissan Carlos Ghosn with financial misconduct because he allegedly didn’t report his pay package when he was still chairman for about five years. Ghosn has already denied these allegations in the past but the reports said that since there are further accusations against him regarding how he allegedly understating his pay so that will result to him being detained till the end of the month. Ghost was actually arrested in November.

According to this defense team, all these allegations are not true at all since they do not exactly relate to his salary. What the prosecutors were said to be referring to must be the future payments that he has yet to be expected once Ghosn retired. When asked what they think about the situation, Nissan simply said in a statement that they are taking this matter very seriously.

The automaker also said that something as serious as making accusations towards their current or former executives or any key people in the company will harm the integrity of Nissan. Rumor has it that the company has already predicted that there will be a time that this will happen. He was known to be a hero for saving Nissan from collapse years ago. This is why the Ghosn is not the only one facing this case since Nissan was said to be involved in it as well. Another former Nissan executive Greg Kelly was also arrested for the same reason at the same time Ghosn was arrested.

This was all because of the $44 million security filings that the former Nissan executive didn’t report over the course of five years, which said to have ended back in March 2015. In Japan, when someone files a false financial statement, that person will have to spend up to 10 years in prison or fined $89,000. This, of course, is affecting Nissan very badly, it even led to a continued downfall in shares that already dropped by 3 percent since last weekend. The alliances between other companies have also been affected such as with Renault and Mitsubishi.

Nissan and Renault Downfall

Neither Ghosn nor Kelly made a comment regarding the allegations, in fact, there were more than was being said by the Japanese prosecutors wherein Ghosn under-reported his income once more by $38 million in the past two years. Even if they have been arrested last month, they were now re-arrested and are detained for questioning that may last for 20 days with the approval of the Japanese court. 9 out of 10 people who are charged with the same case end up being convicted in Japan.

The spokesperson for Nissan said earlier this week that they have already seen the evidence that was presented to them and considered it as substantial and compelling enough for them to reach in a unanimous vote. It was also revealed that Renault has already launched their own internal audit because of the allegations against their CEO, however, the results have yet to be disclosed.

The sharing of pieces of evidence between Nissan and Renault have the approval of the prosecutors in Japan and this may lead to Renault having to change their view on this issue. Ghost previously filed for a complaint regarding his month-long detention, but this was expectedly denied by the court of Tokyo.

Nissan and Renault, on the other hand, revealed that despite this crisis that both of them are going through, they will remain allies, this has even been backed up by the French as well as the Japanese government. It is still not yet confirmed as to what exactly the next move will be for Ghosn, but once the pieces of evidence against him come out then he will most likely be out to jail. Financial analysts, however, predict that this will be a tough time for both Nissan and Renault, and they may need to wait for a time before they bounce back and let the issue die on its own once this is all over.