Ghosn faces a mountain of legal woes (Kazuhiro NOGI)

Tokyo (AFP) – Carlos Ghosn was hit with a fourth formal charge on Monday, deepening the legal woes for the former Nissan boss who has spent several months in a Japanese detention centre under questioning from prosecutors.

Here are the charges and some of the allegations against Ghosn, who denies any wrongdoing and insists he is victim of a “plot” by “backstabbing” Nissan executives fearful he would move the firm too close to French partner Renault.

– Charge 1 and 2: Under reporting income –

Prosecutors allege that Ghosn, with the help of his right-hand man at Nissan Greg Kelly — also under arrest but freed on bail — under-reported his compensation in financial documents for at least eight fiscal years to the tune of 9.23 billion yen ($82 million).

There are two separate charges, one for the period 2010-2015 and another from 2015 to 2018.

Authorities allege the scheme involved deferring some of Ghosn’s compensation until his retirement — possibly to avoid criticism over his hefty pay — and that failure to declare that in official documents to shareholders constitutes financial misconduct.

Ghosn has said the draft proposals for post-retirement compensation were “reviewed by internal and external lawyers, showing I had no intent to violate the law”.

Nissan decided to put the full amount as a charge in its accounts at the end of March.

– Charge 3: Shifting losses to Nissan –

On January 10, Ghosn was hit with a third, more serious, charge of aggravated breach of trust.

He is accused of trying to get Nissan to cover around 1.85 billion yen in personal foreign exchange losses during the 2008 financial crisis when the value of the safe-haven yen soared and his Nissan stock plummeted.

They allege that when Ghosn failed to get Nissan to shoulder the losses, he then had a Saudi business acquaintance put up the additional collateral demanded by the bank holding the contracts.

He is then accused of having transferred $14.7 million in Nissan money from his “CEO reserve” fund to the associate to compensate him for the collateral.

Ghosn said the money transferred to the Saudi associate, whom he named as Khaled Juffali, was for work he had done for Nissan, describing him as a “long-time supporter and partner” of the firm.

A statement issued on behalf of Juffali’s company by a PR firm also defended the money as payments for “legitimate business purposes”.

– Charge 4: The ‘Oman route’ –

The fourth charge is for allegedly transferring millions from Nissan funds to a dealership in Oman, from which the executive supposedly skimmed off $5 million for his personal ends. 

According to sources close to the case, part of the money was used for investments by a company controlled by his son and other funds channelled to a firm run by his wife to go towards the purchase of a luxury yacht.

Renault in France has also handed documents to authorities apparently showing similar financial misconduct amounting to millions of euros.

– Internal investigations –

Nissan, which began its own internal investigation in summer 2018 after a whistleblower came forward, has made several further allegations that have not yet resulted in formal charges.

Among them are accusations that Ghosn used a subsidiary purportedly set up to help fund Nissan’s tech investments to pay for personal residences in Rio de Janeiro, Beirut and Paris.

Nissan also believes Ghosn was paying his sister up to $110,000 a year between 2003-2016 for a fictitious role as an advisor.

Asked about these allegations by AFP, Ghosn complained there was an “army” of Nissan investigators against him and denied any wrongdoing.

In France, authorities are also investigating the hiring of the sumptuous Palace of Versailles for his 2016 wedding — a service worth 50,000 euros. 

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.