Greg Kelly, Nissan Motor Co.’s representative director, who was arrested on the same day as Chairman Carlos Ghosn for allegedly conspiring in financial misconduct, has denied that Ghosn’s salary was falsely underreported in the company’s securities reports, sources close to the matter said Saturday.
Kelly said that Nissan’s securities reports were properly written and that there were no problems with them, the sources said. It is the first time that comments made by either of the two Nissan officials on the allegations have become known since their arrest Monday. Both Ghosn and Kelly were stripped of their posts at an emergency board meeting Thursday.
Tokyo prosecutors arrested Ghosn for allegedly underreporting his salary by around ¥5 billion ($44 million) for five years through fiscal 2014 while receiving nearly ¥10 billion during that period.
The 64-year-old Ghosn is also suspected of having tried to cover up a total of ¥8 billion in remuneration by underreporting his salary for eight years, according to another sources familiar with the matter.
Ghosn allegedly determined his remuneration as about ¥2 billion per year and underreported it by half, the sources said. The ¥8 billion was apparently intended to be paid to him after he stepped down as chairman and assumed a new position.
Ghosn is believed to have made his remuneration look smaller to avoid criticism from Nissan shareholders, the sources said.
The underreporting that allegedly continued in the following three years would bring the total amount of money covered up to around ¥8 billion, they said.
Meanwhile, Nissan’s corporate auditors have suspected that the company bought residences for Ghosn through its overseas subsidiary that is not actually operating, those sources said.
The subsidiary is Zi-A Capital BV, based in Amsterdam. Nissan invested some ¥6 billion when it set up the subsidiary in 2010.
Ghosn became a board member of Zi-A Capital when it was established but resigned the following year. The 62-year-old Kelly and some former Nissan executives’ names appeared on the list of its board members.