Business / Corporate

Nissan reports Carlos Ghosn's alleged ¥9.2 billion in understated income on firm's earnings statement

by Kazuaki Nagata

Staff Writer

Nissan Motor Co. recorded ¥9.2 billion in its latest earnings statement, issued Tuesday, that ousted Chairman Carlos Ghosn had allegedly failed to report as his income.

The automaker also slashed its full-year profit forecasts amid sluggish demand in the North America market and other markets worldwide. Nissan now expects its operating profit to fall to ¥450 billion, down 21.7 percent from the previous year, and its net profit to ¥410 billion, 45.1 percent lower from a year earlier.

Ghosn has claimed that he never received undisclosed incomes and that he had no binding agreement with Nissan regarding the ¥9.2 billion payment, which he was apparently going to receive after his retirement. He also said the matter related to his post-retirement allowance was checked by lawyers, stressing that he had no intention of performing an unlawful act.

The ¥9.2 billion, which was posted as “salary and allowance,” is a “conservative estimate” and not a finalized figure, as the investigation is still ongoing, Hiroshi Karube, Nissan’s chief financial officer, said during a news conference at the firm’s headquarters in Yokohama.

Asked whether Nissan plans to pay Ghosn the income, President and CEO Hiroto Saikawa said that is undecided but added that he personally doesn’t think it will happen.

The Tokyo District Public Prosecutor’s Office arrested Ghosn, often credited with saving Nissan after he came to lead the firm in 1999, and his aide Greg Kelly, a former representative at the firm, in November on suspicion of underreporting some ¥5 billion of Ghosn’s ¥10 billion salary between 2010 and 2015.

The prosecutors subsequently arrested him again for allegedly understating about ¥4.2 billion between April 2015 and March 2018, bringing the total in allegedly unreported income to about ¥9.2 billion.

This was the first earnings report since Ghosn’s arrest.

As for the April-December earnings, although sales increased to ¥8.57 trillion — from ¥8.52 trillion in the same period the previous year — the nine-month operating profit fell 13.9 percent to ¥313.7 billion. Net profit plunged 45.2 percent to ¥316.7 billion.

Factors for the slump included weak sales in North America and Europe, where unit sales were down 8.4 percent and 15.8 percent, respectively.

Saikawa said the firm failed to meet its business goals in the October-December period, which led to downward revision of the full-year forecast. He added that it would be unrealistic to expect everything to be recovered in the final quarter.

The partnership with Renault SA has been going through a challenging period due to the allegations against Ghosn, but Saikawa said he seeks to build a relationship of trust with new Renault Chairman Jean-Dominique Senard, who is scheduled to visit Japan this week.

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5