Nissan Takes $83 Million Charge As Profit Forecast Cut On Ghosn

Nissan Chairman Carlos Ghosn
The arrest of Nissan Chairman Carlos Ghosn has disturbed the auto industry on a worldwide scale as he is the center of a business alliance between Nissan, Mitsubishi, and Renault. (Photo: REUTERS/Regis Duvignau)

President and CEO Hiroto Saikawa announced that Nissan Motor Co. charged former Chairman Carlos Ghosn $83 million of under-reported compensation. The company's ousted chairman is currently in prison after cases against him were filed as the company that he underreported his income for eight years. The announcement was delivered by the CEO at a press conference where he presented the company's financial result for the last nine months of 2018. Reports said that Nissan cut its full-year profit forecast in relation to the charge.

Nissan's Chief Financial Officer Hiroshi Karube said that the company took into account the alleged payments accorded with the former Chairman despite still not having settled the amount which would vary dependent to the result of the investigations of the public prosecutor's office and the authorities as they determine the exact amount.

The former Chairman was held in prison since November 19 after the company found out that he failed to declare a part of his income from 2011 to 2018. He was also accused of using the company to cover a series of personal financial loses during the 2008 crisis that violated a Japanese business regulation. He is also linked to an anomaly regarding alleged unjustified payments to a Saudi Businessman.

The company replaced the former Chairman with Saikawa. Renault also replaced him with Jean-Dominique Senard as President. The new Renault President plans to visit Tokyo in the aim to meet Saikawa. The Japanese CEO announced his willingness to work with his French counterpart and he said that he is hoping to discuss and revise the existing Renault-Nissan and Mitsubishi alliance.

Saikawa said that he aims to create trust and good communications between the alliance members' operational teams while avoiding granting excessive power to the leader of the alliance. He added the executives of the company, including him, felt responsible for not having discovered Ghosn' alleged irregularities and not having to stop it.

On separate news, two lawyers defending Ghosn filed their resignation on Wednesday, February 13. The lawyers who resigned included his top defending lawyer, Motonari Otsuru. There were no immediate comments on their reasons for resigning Ghosn's defense team. Their law firm said in a brief statement that Otsuru and Oshikubo submitted letters of resignation to the court as the defense lawyers for the case of Mr. Ghosn. There were no further details regarding their reasons. Otsuru is known in dealing with high-publicity cases but he is also known to maintain a low media profile.

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