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Nissan, Executives Charged With Underreporting Pay

A commission official said Monday that Nissan, Carlos Ghosn and Greg Kelly were suspected of falsifying millions of dollars' worth of Ghosn's income

Japan Nissan Ghosn
Eugene Hoshiko/AP

Tokyo prosecutors have charged Nissan's former chairman Carlos Ghosn, another executive and the automaker itself for allegedly underreporting income.

The charges imposed Monday involve allegations Ghosn's pay was underreported by about 5 billion yen ($44 million) in 2011-2015. The prosecutors said earlier that the allegations were the reason for Ghosn's arrest on Nov. 19.

The prosecutors issued statements also outlining new allegations Monday against Ghosn and Greg Kelly, the other executive. The fresh allegations are of underreporting another 4 billion yen ($36 million) in 2016-2018. Nissan as a company was not mentioned in the latest allegations.

In Japan, a company can be charged with wrongdoing.

Some kind of action by the prosecutors had been expected because the detention period allowed for the allegations disclosed earlier was to end on Monday.

Nissan Motor Co. confirmed the charges against it in a statement and vowed to strengthen its governance and compliance.

"Nissan takes this situation extremely seriously," it said.

"Making false disclosures in annual securities reports greatly harms the integrity of Nissan's public disclosures in the securities markets, and the company expresses its deepest regret."

Kelly, 62, is suspected of having collaborated with Ghosn. Kelly's attorney in the U.S. says he is asserting his innocence, noting that insiders at Nissan said the procedure was legal.

Ghosn has not commented.

Ghosn was ousted as Nissan chairman and Kelly lost his representative director title following their arrests, but they both remain on Nissan's board pending a shareholder's meeting.

Ghosn, 64, was sent to Nissan by its partner Renault SA of France in 1999. He led a dramatic turnaround of the near-bankrupt Japanese automaker. But Ghosn's star-level pay drew attention since executives in Japan tend to be paid far less than their international counterparts.

Only Ghosn's attorneys and embassy officials from Lebanon, France and Brazil, where he has citizenship, have been allowed to visit him.

It is typical in the Japanese legal system for there to be little access to comment by suspects. Prosecutors have also said little.

Shin Kukimoto, deputy chief prosecutor at the Tokyo District Prosecutor's Office, declined to say if the suspects were rejecting the allegations. He said Ghosn and Kelly were being detained because they are considered flight risks.

He also denied that the two would be forced to make confessions.

"We do not have such a scenario. There is no such thing and we do not force suspects to make confessions to fit the story," Kukimoto said.

Meanwhile, the Securities and Exchange Commission said it had filed criminal complaints against Ghosn, Nissan and Kelly. A commission official said Monday that Nissan, Ghosn and Kelly were suspected of falsifying reports on millions of dollars' worth of Ghosn's income.

AP Business Writer Yuri Kageyama contributed.

Copyright AP - Associated Press
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