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Nissan's Ghosn crisis

Prosecutors to indict Nissan in Ghosn case

Company accountable for not stopping misconduct, prosecutors say

Sources say it is likely that Nissan Motor will be indicted over misstatements in five annual reports. (Photo by Kosaku Mimura)

TOKYO -- Tokyo prosecutors are set to file charges against Nissan Motor amid ongoing investigations into alleged underreporting of salaries by former Chairman Carlos Ghosn, Nikkei has learned.

The company, along with Ghosn and former Representative Director Greg Kelly, are expected to be indicted on Monday, when the two suspects’ detention period expires.

Making false statements in an annual report is a crime for which companies can be held accountable, in addition to the individuals involved. Prosecutors appear to be pressing charges against Nissan for not stopping its leader from allegedly stating false information over a number of years.

Sources say it is likely the company and the two former executives will be indicted over misstatements in the five annual reports leading up to the fiscal year ending March 2015. Ghosn and Kelly are expected to be rearrested for another three years’ worth of underreporting after that period.

Ghosn's annual compensation was set at around 2 billion yen ($17.7 million). That figure was cut significantly after the disclosure of individual compensation became mandatory in 2010, with a portion of his remuneration to be deferred -- a figure that was not reported in financial statements.

The amount that was to be deferred for the eight years through fiscal 2017 is understood to total 9 billion yen.

According to sources, both Ghosn and Kelly have acknowledged deferring the payment but denied the charges, arguing that they were not obligated to report the deferred amounts as the figures had not been finalized.

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