Nissan is facing a potential 4 billion yen, or $37 million, fine after Japanese regulators found that the company underreported its former CEO Carlos Ghosn's compensation. The Japanese Securities and Exchange Surveillance Commission is expected to impose the fine over grounds that the company failed to properly report all of Ghosn's compensation.
According to Japanese regulators, Nissan's malpractice has a negative impact when it comes to investor decisions. In November 2018, Japanese authorities arrested Ghosn in Tokyo over grounds that he improper enrichment at the expense of the company's coffers. Investigations revealed that Ghosn underreported his compensation by about $84.7 million over nearly a decade.
Ghosn denied any wrongdoing, and he claims that he is a victim of Nissan's pressure.
Before officially imposing the fine, Japan's SESC must first complete an investigation which is expected to commence within the next few days. The start of the investigation awaits Nissan's latest financial statements, which the company is expected to file in the days to come.
While Nissan is facing a potential $37 million fine, Japanese regulators can trim this down to just $22.3 million. However, this will only take effect if Nissan decides to file the required financial statements before the investigation starts. Additionally, Nissan will also have to acknowledge that previous financial statements were indeed inaccurate.
Regarding this Ghosn debacle, Nissan CEO Hiroto Saikawa said in a statement, "We were a bit slow in taking action. We are intensifying our effort to catch up as soon as possible."
Despite this admission, several investors are still angry with Saikawa who they believed was also partial to the chaos brought about by Ghosn. Despite this, Saikawa was voted back to the board by Nissan's shareholders in a recent meeting. During the same meeting, measures to mitigate the fallout of the Ghosn scandal were voted into effect.
Nissan shareholders have decided to approve certain measures to repair its strained relationship with French carmaker Renault. The partnership was nearly dissolved in May when Fiat Chrysler Automobiles offered Renault a merger in which the two companies will each own 50 percent of a newly established company.
Saikawa rejected this idea of merging the two companies. Nevertheless, he stands committed to finding common ground with Renault. Nissan is expected to release its latest financial statement in a couple of days, and market experts are predicting that the company will post its lowest earnings in the last 11 years.