See More on Facebook

Business

Ghosn and prosecutors at odds over ‘losses inflicted on Nissan’

Former chairman to spend Christmas and New Years in jail.


Written by

Updated: December 26, 2018

In connection with his rearrest on suspicion of violating the Companies Law, former Nissan Motor Co. Chairman Carlos Ghosn has denied he misappropriated Nissan funds for personal use in two particular instances, saying neither instance constituted a special breach of trust under the law.

As in the case regarding false reporting of his annual executive remuneration in the automaker’s securities reports, for which Ghosn, 64, was indicted, the former chairman and the special investigation squad of the Tokyo District Public Prosecutors Office are in direct conflict over their assertions.

According to the defense counsel who met with him shortly after his third arrest, Ghosn seemed unconvinced with the latest charge, though he showed no sign of dissatisfaction or distress. With his term of detention set to end on Jan. 1, Ghosn faces the prospect of greeting the New Year in detention. There is even a possibility his term will be extended.

The latest arrest was on suspicion of two particular acts.

One is that Ghosn shifted private appraisal losses worth about ¥1.85 billion ($16.8 million) — incurred through a swap transaction contract with a bank — from his own asset management company to Nissan in October 2008, by naming Nissan as the party that had signed the contract.

The other is that, from June 2009 to March 2012, he had a total of $14.7 million transferred from funds managed by a Nissan subsidiary to an acquaintance in Saudi Arabia, who aided Ghosn in his bid to obtain a credit guarantee over the contract with the bank.

The special squad suspects that, in both cases, Ghosn inflicted property damage on Nissan by actions that ran counter to his duties as representative director and chief executive officer of the automaker.

According to informed sources, Ghosn signed a swap transaction contract with Tokyo-based Shinsei Bank in order to exchange executive remuneration paid in yen with U.S. dollars. Swap transactions enable deals involving large sums of money to be made with little capital, but are risky because huge losses can be incurred if market projections turn out to be wrong.

Ghosn did in fact suffer private appraisal losses due to the yen’s steep rise following the collapse of Lehman Brothers in autumn 2008. Ghosn, who was then asked by Shinsei Bank to provide additional collateral, allegedly transferred all of his rights, including the appraisal losses, from his own asset management company to creditworthy Nissan, thus avoiding the need for additional collateral.

The Securities and Exchange Surveillance Commission and others consider this move to be problematic. Ghosn allegedly returned these rights to his asset management company around February 2009. But a senior official at the public prosecutors office said, “even if it was temporary, as long as Ghosn forced the company to assume the appraisal losses from his private transactions, it would constitute a crime.”

While admitting to the transfer itself during his interrogation by the special squad, Ghosn told them he only temporarily used Nissan’s assets and creditworthiness. Although damages totaling several tens of millions of yen incurred in the several months following the transfer were paid under the name of Nissan, Ghosn asserted that he paid the same amount of money into Nissan, and that he had not caused damage to Nissan and had no intention of doing so.

The statute of limitations for aggravated breach of trust is seven years. Ghosn’s defense counsel, Motonari Otsuru, a lawyer and former head of the special investigation squad, said, “If it were not Ghosn, who has a presence overseas, the statute of limitations would have been up. Since Nissan has not actually suffered any losses, it’s not worth punishing him.”



Enjoyed this story? Share it.


The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Business

Huawei asks US court to overturn ban

The company is suing the FCC, the latest in a series of legal tussles. The legal battle between Huawei Technologies Co and United States government intensified on Thursday. The Chinese tech heavyweight announced a legal challenge to the US Federal Communications Commission, seeking to overturn the latter’s order that bans telecom carriers from buying the company’s equipment via federal subsidies. The move is the latest push by the world’s largest telecom equipment maker to pursue fair competition and treatment amid a slate of restrictions from Washington. Analysts said the FCC ban would have very limited impact on Huawei’s financial performance, but labeling the company as a national security threat would cause far-reaching reputational harm. In a petition filed in the US Court of Appeals for the Fifth Circuit on Thursday, Huawei asked the court to declare the FCC order un


By Esther Ng
December 6, 2019

Business

Is Vietnam an attractive place for Samsung chip plant?

The tech giant already has manufacturing plants in the country. Is Vietnam a good place for chipmakers to consider building a high-tech plant? In light of a request by the Vietnamese head of state to Samsung Electronics, the world’s largest chipmaker, many in South Korea are asking whether it is a viable business move. In a private meeting held in Seoul on Thursday, Vietnamese Prime Minister Nguyen Xuan Phuc asked Samsung Electronics Vice Chairman Lee Jae-yong to consider building a chip manufacturing facility there. The Korean tech giant already has production plants for mobile phones and other IT devices in the country. Following the re


By Zaffar Abbas
December 2, 2019

Business

Nepal’s luxury hotels are growing but the rooms are empty

There are 15 five-star hotels in the country, and a dozen more are being planned even as existing hotels continue to report a significant drop in profit. High-end hotels might be proliferating across the country but there aren’t enough guests to fill them up, according to the financial reports of Nepal’s three key five-star institutions. The first quarter financial reports from Taragaon Regency Hotels, Soaltee Hotel and Oriental Hotels, all of which are listed on the Nepal Stock Exchange, showed that profits have taken a nosedive after posting record profits last fiscal year. The first quarter of the fiscal year runs from mid-July to the end of September. The three hotel groups say that unhealthy competition, like price undercutting, a demand-and-supply gap, and a growing number of backpackers are behind the sharp fall in earnings. According to its report, Oriental Hotels, which operates Radi


By The Kathmandu Post
November 21, 2019

Business

Huawei to match Google’s mobile services by Q1 2020

The company to support more Android apps on its phones. Huawei may soon be able to offer Android developers a full range of the essential mobile services required for their apps as the ones provided by Google. This would allow more Android apps to work on new Huawei phones affected by a ban that forbids the use of Google mobile services on these handsets. Mr Zhang Ping’an, president of Huawei Consumer Cloud Service told The Straits Times in an interview at Huawei’s Asia-Pacific Developer Day last Wednesday (Nov 13) that Huawei Mobile Services can “replace 90 per cent of Google Mobile Services by December”. These mobile services from Google and Huawei are used by developers to enable key functions in their mobile apps to, for


By The Straits Times
November 21, 2019

Business

Excessive discounts worked against Nissan Motor profits

The company has been on the back foot since its former CEO was accused of mismanagement. Nissan Motor Co. has reported a massive 85 percent decline in operating profits — an area that indicates the strength or weakness of a company’s main business — in its midterm consolidated financial report for the half fiscal year ending in September. The pursuit of increased sales has harmed profitability, delaying the development of new Nissan models. That in turn has resulted in fewer sales — a vicious cycle the automaker is struggling to escape from. Nissan Motor’s deteriorating business performance may affect its three-way partnership with Renault SA, the French automaker that is its largest shareholder, and Mitsubishi Motors Corp. Failed strategy by Ghosn Nissan Corporate Vice President Stephen Ma, who will become chief financial officer on Dec. 1


By The Japan News
November 14, 2019

Business

US property loses allure for Chinese buyers

Economic factors contribute to falling demand.  Over the past 10 months, Bei Qin, a realtor in Silicon Valley, California, has not had any clients from China, a market that used to be her major source of business. “We had the best business in 2016 and 2017. Every day, we had inquiries from Chinese buyers and every week our WeChat account had more than 10 new subscribers,” said Qin, president of ACEQ Investment Group in Cupertino. “Now those days are gone.” After a decade of increasing investment by wealthy Chinese in residential property purchases in the United States-the biggest proportion of international buyers for seven consecutive y


By Esther Ng
November 12, 2019