Business

U.S. charges Nissan and ex-CEO Carlos Ghosn with hiding $140 million from investors

AFP-JIJI

U.S. securities regulators have charged Nissan and its embattled former CEO, Carlos Ghosn, with hiding more than $140 million in Ghosn’s expected retirement income from investors.

Ghosn will pay $1 million in fines to settle the matter without admitting wrongdoing, and will be barred from serving as a corporate executive for 10 years, the Securities and Exchange Commission said in a statement Monday.

Nissan will pay a $15 million fine. The SEC also charged former board member Greg Kelly with aiding in the fraud.

The SEC said Ghosn, working with Kelly and other subordinates, devised ways to disguise large amounts of compensation to Ghosn.

These included entering into secret contracts, backdating letters to grant Ghosn interest in Nissan’s long-term compensation plan and changing the calculation of Ghosn’s pension to allow more than $50 million in additional benefits, the SEC said.

“Investors are entitled to know how, and how much, a company compensates its top executives,” said Stephanie Avakian, co-director of the SEC’s Division of Enforcement. “Ghosn and Kelly went to great lengths to conceal this information from investors and the market.”

Ghosn, who was fired from Nissan last November, settled without admitting or denying the SEC’s charges, as did Nissan and Kelly.

Ghosn has denied any wrongdoing and accuses Nissan executives opposed to his plans to further integrate the firm with France’s Renault of plotting against him.

“We are satisfied with the conclusion of the U.S. case,” said a statement from attorneys representing Ghosn. “The settlement specifically allows Mr. Ghosn to continue to fight the allegations against him in Japan, which Mr. Ghosn intends to pursue vigorously. We are confident that once the case is heard in its entirety, Mr Ghosn will be acquitted.”

The agency also said Nissan misrepresented Ghosn’s pension allowance to investors, a move that “advanced Ghosn and Kelly’s deceptions and misled investors, including U.S. investors,” Avakian said.

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