ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nissan's Ghosn crisis

Saudi friend gave Ghosn 3bn yen guarantee on losses

Prosecutors home in on whether Nissan money was used in quid pro quo

Carlos Ghosn attends a business forum in Riyadh in January 2009. The then-chairman of Nissan Motor apparently secured a 3 billion yen credit guarantee from a Saudi acquaintance that year.   ¬© Reuters

TOKYO -- A Saudi acquaintance of Carlos Ghosn in 2009 provided a roughly 3 billion yen ($27 million at current rates) credit guarantee benefiting the then-chairman of Nissan Motor when he faced heavy losses on a private transaction, people familiar with the matter said on Monday.

The trail of payments is crucial to the case that Tokyo prosecutors are building against Ghosn, who was rearrested last Friday on the more serious charge of aggravated breach of trust for allegedly misusing Nissan money.

Prosecutors are investigating whether nearly $15 million paid to a company run by the Saudi acquaintance out of the Nissan chairman's discretionary funds was meant as compensation for the credit guarantee.

After the 2008 global financial crisis, Ghosn's personal asset management company suffered substantial paper losses on a currency swap contract with Shinsei Bank as the yen appreciated sharply.

When the Tokyo-based bank asked the firm to put up more collateral, Ghosn's acquaintance sent a letter of credit issued by a foreign bank, people familiar with the matter said.

The Saudi apparently covered the necessary fees, which typically come to several percent of the amount guaranteed.

A Nissan subsidiary later paid $14.7 million to a company run by the Saudi associate in four installments between June 2009 and March 2012. The payments were booked as "promotional costs" and came from a "CEO reserve" at Nissan that Ghosn could tap to handle expenses as needed.

Ghosn insists that this was legitimate payment for services rendered, according to his attorney. The associate lobbied the Saudi government and royal family in support of Nissan and helped resolve trouble between the automaker and local dealerships, the lawyer has reportedly said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media