Nissan Found Guilty, Fined $1.7 Million Over Ghosn Income Scandal

The company will not appeal the judgment.

By: Jacob Oliva

Mar 3, 2022 at 8:02pm ET

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Nissan has received a guilty judgment from the Tokyo District Court this week. This is in line with the scandal involving former chairman Carlo Ghosn and board member Greg Kelly a few years ago. This, as we all know, resulted in the ex-Nissan boss fleeing the country in a rather dramatic way.

To recall, Nissan reported a misconduct led by its former chairman and others in September 2019. An internal investigation was conducted by Nissan and external lawyers, which found that Carlos Ghosn and Greg Kelly collaborated to underreport Ghosn's compensation in Nissan's annual securities reports.

Based on these findings, the Japanese Financial Services Agency imposed an administrative monetary penalty on the company on February 27, 2020, due to material misstatements in past annual securities reports. These acts were a violation of the Financial Instruments and Exchange Act (FIEA), which Nissan contended to be indisputable.

That said, Nissan received a guilty judgment dated March 3, 2022 and was ordered a penalty of 200 million yen or $1.7 million in today's exchange rates. After careful consideration of the principal penalty and the findings in the judgment, Nissan has decided it will not appeal. The company also said that it has been undertaking steps to strengthen its governance and reform its corporate culture, to prevent such misconduct.

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Ghosn, who is now believed to be residing in Lebanon, has a standing Interpol arrest warrant for the said scandal. The former Renault-Nissan-Mitsubishi Alliance chairman remains a fugitive at this point.

Despite the predicament he's currently in, Ghosn doesn't fall short in criticisms of his previous employer. In 2020, he said that the company will be bankrupt in two to three years. The following year, he said that the company has become boring and mediocre.

Source: Nissan