"Concentration of Power" behind Ghosn's Misconduct

Tokyo, Nov. 20 (Jiji Press)--Nissan Motor Co. <7201> Chairman Carlos Ghosn, arrested Monday for allegedly underreporting his executive remuneration, is suspected of using his powerful mandate at the company to conceal his misconduct for long years, informed sources said Tuesday. Nissan representative director Greg Kelly, 62, also arrested Monday for suspected conspiracy with Ghosn, was a close aide to the 64-year-old chairman. The scandal was revealed by a whistleblowing report. After receiving the report, Nissan conducted an internal investigation for months, found several cases of serious wrongdoing by Ghosn and reported the findings to Tokyo public prosecutors. The prosecutors made a Japanese-version plea-bargaining deal with Nissan, under which the company provided information in exchange for mitigation of criminal punishment, according to the sources. The prosecutors hope to figure out how the wrongdoing was carried out based on evidence obtained through the plea-bargaining deal and materials seized when they searched Nissan's head office in Yokohama, Kanagawa Prefecture, south of Tokyo. This is the second plea-bargaining deal that has come to light in Japan, following one over a bribery case built against a former executive of Mitsubishi Hitachi Power Systems Ltd. The Japanese plea-bargaining system is designed to reward criminal suspects or defendants who provide public prosecutors with information on the crimes of others. It is different from the U.S. system, in which suspects or defendants receive lighter punishment for confessing their own crimes. According to investigative sources, Ghosn is suspected of underreporting in financial statements his executive pay over five years to March 2015 by some 5 billion yen, in violation of the Financial Instruments and Exchange Act. Nissan said Ghosn was also found to have misused the company's investment funds and made private use of corporate money. In 2005, Ghosn, who hails from major French automaker Renault SA, became chief executive officer both at Renault and Nissan. As Renault is a major shareholder in Nissan, Ghosn acquired an overwhelming power within the Japanese automaker, according to Nissan. Meanwhile, Kelly assumed the post of corporate vice president at Nissan in 2008. He gained major in-house influence by constantly working as a close aide to Ghosn. Such concentration of power apparently prevented the scandal from being revealed for a long time, the sources said. <6501> <7011> END