A recommendation for imposing a fine of about 2.4 billion yen ($22 million) on Nissan was made by Japan’s markets watchdog against Nissan over the issue of the auto maker underreporting the compensation paid to its former Chairman Carlos Ghosn.
Markets watchdog the Securities and Exchange Surveillance Commission (SESC) said that the four financial years from April 2014 to March 2018 would be covered in the fine.
Last November, Ghosn was arrested in Tokyo over charges of financial misconduct. It was alleged that the former icon of the global auto industry had also underreported the salary he was paid for a period of almost a decade which amounted to almost 9.1 billion yen. He was also charged with acts that helped to transfer his personal losses to the accounts of Nissan with the car company bearing the losses.
Ghosn had denied all the allegations and is currently out on bail. His trial is set to begin next year.
An SESC official told a press briefing that no liability of underreporting will fall on Nissan before the financial year starting April 2014 because of the statute of limitations.
A final decision on the fine will be taken by the Financial Services Agency, Japan’s financial regulator.
According to the SESC, if the Financial Services Agency follows up on the recommendations of the SESC, it would be the second largest fine ever in the corporate history of Japan imposed against a company over false reporting in a corporate financial statement. The largest fine ever was imposed In 2015 on Toshiba that amounted to 7.3 billion yen.
It was taking the SESC’s recommendations seriously, Nissan said in a statement. “We express deepest regret to stakeholders for any trouble caused. We will continue efforts to strengthen governance and compliance including ensuring accuracy of corporate information disclosure,” the automaker said.
The official of the SEC told reporters that the investigations by the agency had led it to conclude that false reporting had been done by Nissan.
A pledge to bring in profitability in the company was made on the first of his assuming office on December 2 by Nissan’s new CEO, Makoto Uchida. He also said that one of the key tasks would be to set realistic targets to achieving profits in the efforts being made by the company to break free of the traditions set by Ghosn.
Previous reports in June this year had anticipated a fine of up to 4 billion yen for Nissan which could be ultimately reduced to about 2.4 billion yen if documents were filed to the SESC by the company prior to the commencement of a formal investigation.
Nissan recently announced a drop in profitability was the lowest in decades along with a decision to cull 12,500 job cuts. The company’s top management was also replaced in its efforts to stage a comeback.
(Adapted from Europe.AutoNews.com)