Regardless of the heat faced by Carlos Ghosn, Hiroto Saikawa, and Nissan Motor in the financial misconduct, the key question here is how is this going to impact the Nissan’s alliance with Renault!
According to sources familiar with the matter at hand, Tokyo prosecutors have intensified their scrutiny of Nissan Motor’s CEO Hiroto Saikawa’s role in the financial misconduct scandal as well as that of the carmaker’s Chairman Carlos Ghosn; as a result Ghosn is likely to be indicted.
To recap, on November 19, Ghosn was arrested on suspicion of conspiring to understate his compensation by about half of the actual $88 million (10 billion yen) he received over the five years starting from 2010. As per Nissan, the misconduct was executed with the help of former Representative Director, Greg Kelly.
Sources opine Tokyo prosecutors plan on re-arresting the two executives.
Sources have preferred the cover of anonymity since they were not authorized to speak to the media.
According to media reports, Tokyo prosecutors have filed fresh charges for an additional three years of under-reported income.
Apart from the two executives, Nissan is also likely to be indicted for making false statements in an annual report, said sources. As per another sources, Hiroto Saikawa, Nissan Motor’s CEO could also be indicted.
According to analysts, Nissan would find it difficult to avoid taking the blame regardless of its argument that other executives had no knowledge of Ghosn’s misconduct, or that it lacked adequate internal controls.
“Normally, if it’s falsifying the financial filings, the company as well as the perpetrator is charged. That’s not surprising. It’s to be expected,” said Nobuo Gohara, a prominent lawyer who is also a former prosecutor.
He went on to add, “Now suddenly the issue of CEO Saikawa becomes bigger. It becomes difficult to overlook Saikawa’s role in all of this. That becomes the main focus now.”
Although neither Kelly nor Ghosn made any statement through their lawyers, Japanese media reports have stated that the duo have denied the allegations.
In November, Nissan’s board had agreed to create a special committee and had also agreed to take advice from an independent third-party group on matters to improve governance and oversight of the compensation of directors.
With regard to the Renault-Nissan alliance, Ghosn’s and Kelly’s arrest have shaken the foundation of the alliance. Ghosn still is the chairman and CEO of Renault SA.
The key question that is yet to be answered is how this development could alter the ownership structure of the alliance.
Renault has nearly 43% stake in Nissan, while Nissan has 15% non-voting rights in Renault.
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