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Source Says Auditor questioned Nissan on payments to Ghosn at heart of scandal

Nissan Motor Co’s (7201.T) auditor had often interrogated transactions at the core of accusations of financial misconduct by former chief Carlos Ghosn but Nissan said they were right, a person with frank knowledge of the matter said on Wednesday.

Ernst & Young ShinNihon LLC interogated Nissan’s management so many times, mostly around 2013, about acquisitions of overseas luxury homes for Ghosn’s private use and of stock-appreciation rights that were bestowed on him.

Yet, Japanese automaker said the transactions and financial reporting were suitable, the source told Reuters on condition of anonymity.

The disclosures shows Nissan and its auditor were discussing the transactions, in obvious contrast with Nissan’s disagreement that the supposed misreporting of benefits for Ghosn was chauffeured by Ghosn and a key lieutenant.

According to a spokesman for EY ShinNihon, the Japanese affiliate of global accounting firm Ernst & Young, stated that he could not comment on specific cases. A Nissan spokesman refused to comment.

Ghosn was detained on Nov. 19 as he got to Japan. Prosecutors accuse him of faking Nissan’s annual reports to understate by about half his total compensation of some 10 billion yen ($90 million) over many years.

According to Japanese media the top-level former executive repudiated the allegations. Ghosn still in custody and is unable to speak publicly. He is represented by former prosecutor Motonari Otsuru, according to Japanese media.

Otsuru’s law firm refused to comment on Wednesday, and Otsuru has not responded to requests for comment.

Nissan has largely nailed the blame on Ghosn and Greg Kelly, a past representative director who was detained along with Ghosn on the same accusations.

CEO Hiroto Saikawa told a news conference on Nov. 19, describing Ghosn and Kelly “As a result of the investigation, we are certain these two are the masterminds,” He dismissed to say if others at Nissan were involved in the suspected wrongdoing. An internal investigation is currently on, and Nissan exposes it is cooperating with prosecutors.

Nissan and Mitsubishi Motors Corp (7211.T) have dropped Ghosn as chairman in light of his arrest. The French member of the three-firm alliance, Renault SA (RENA.PA), maintains him as chairman and CEO.

EY ShinNihon interrogated Nissan management about Zi-A Capital BV, asking if the Dutch unit, that acquired the overseas homes for Ghosn’s use, was conducting business in line with its stated aim as an investment company, said the source, who has the authority to speak publicly on the matter.

The source said the car maker said Zi-A was directing its business correctly. Japanese media have estimated the transactions at more than 2 billion yen.

In thesame vein, the source disclosed, the auditor asked whether the stock-appreciation rights, which are like stock options but pay out in cash if a share rises to a certain price, should be announced, but Nissan responded that was not necessary. Japanese media say the rights were worth about 4 billion yen.

EY ShinNihon had been the auditor for Toshiba Corp (6502.T) and Olympus Corp (7733.T) through out the financial scandals at the two Japanese companies in recent years. The auditor’s interrogation of Nissan on the transactions was first made known by Japanese public broadcaster NHK.

Reuters

Frank Spector
Frank Spectorhttps://360aproko.com/
Am a writer, blogger and a singer. Just love to live my life to the fullest with God by my side.

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