Ghosn’s trial to center on whether he caused losses to Nissan
Former Nissan Motor Co. Chairman Carlos Ghosn, who was indicted Friday on charges including aggravated breach of trust in violation of the Companies Law, has made clear his confrontational stance against prosecutors on charges that also include violation of the Financial Instruments and Exchange Law by understating his executive remuneration in the company’s securities reports. Whether Ghosn actually inflicted losses on Nissan will be a focal point of the trials.
Regarding the aggravated breach of trust charge, the special investigation squad of the Tokyo District Public Prosecutors Office attaches importance to a series of events including Ghosn transferring to Nissan in October 2008 a valuation loss of about ¥1.85 billion that he incurred through a personal investment, and then sending a total of $14.7 million (about ¥1.6 billion) to his acquaintance Khaled al-Juffali, a businessman in Saudi Arabia.
According to sources, the Securities and Exchange Surveillance Commission became aware that Ghosn transferred the valuation loss to Nissan after it conducted a periodic inspection of a bank with which Ghosn had a deal in around November or December 2008, just after Ghosn transferred the loss. The commission told the 59-year-old former head of Nissan’s secretarial office, who was an aide to Ghosn, that Ghosn could be held legally responsible.
Ghosn hurriedly tried to return the valuation loss, but the bank asked Ghosn to put up additional collateral of several billion yen. In the end, al-Juffali paid about ¥3 billion in guarantee fees on Ghosn’s behalf around February 2009, which enabled Ghosn to avoid putting up the additional collateral, the sources said. Four months later, Ghosn began sending him the ¥1.6 billion mentioned in the indictment.
A senior prosecutor said: “Ghosn was loathe to incur a loss through the investment, so he transferred the loss [to Nissan]. With that as a starting point, other acts followed one after another. It’s clear that he used Nissan for his own private purposes and inflicted loss on the company.”
On the other hand, Ghosn’s lawyers have insisted that an English expression stating there was no loss to the company in the minutes of a Nissan board of directors meeting to decide on the transfer of the valuation loss means that there was an agreement that Nissan would suffer no losses, and thus his acts do not constitute a crime.
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