Carlos Ghosn arrested

Discussion in 'General' started by jdbob, Nov 19, 2018.

  1. jdbob

    jdbob New Member

  2. gooki

    gooki Active Member

    Something smells ...
     
  3. gooki

    gooki Active Member

    .. fishy.
     
  4. gooki

    gooki Active Member

    How can under reporting compensation by 50% for five years straight go unnoticed?

    I can’t find any requirement for directors to report their compensation to the Tokyo Stock Exchange. It appears it’s the companies responsibility. Neither Ghosn or Kelly held accounting or auditing roles were they would be inputting these values.

    If Ghosn and Kelly used their position to force subordinates to manipulate the compensation figures then that would be fraud. But I can’t understand how that wouldn’t be picked up by the auditors, the CFO who sits on the board, or any number of other staff.

    Putting my conspiracy hat on. There’s been some conflict between Ghosn and Nissan’s CEO Hiroto Saikawa and wider board members. Ghosan refused to go or demanded a high price to leave. Nissan board didn’t want to pay out the golden handshake. Saw what happened to Audi’s CEO Rupert Stadler (arrested, dismissed, released), and forced the arrest.

    Source
    https://gettingthedealthrough.com/a...ecutive-compensation-employee-benefits-japan/
     
    Last edited: Nov 20, 2018
  5. Domenick

    Domenick Administrator Staff Member

    I'm having a hard time believing Ghosn is dirty like this. Autoline lays out his suspicions in this video (fast forward to 5:08 mark)

     
  6. gooki

    gooki Active Member

    More details. This is business fraud 101. I find it hard to believe Ghosn would be this greedy and stupid. Equally it raises concerns over Nissan's financial oversight.

     
  7. gooki

    gooki Active Member

    Still sounds odd. The property ownership was never transferred to Ghosn or Kelly.

    Unless their families or friends were living in them rent-free, and even then it sounds incredibly silly for very little gain.
     
  8. gooki

    gooki Active Member

    I retract that statement, because the ownership of the property remains with Nissan. So it looks like Nissans subsidiary tasked with making investments purchased some investment properties. A silly decision for whomever approved that spending, but not fraudulent.
     
  9. gooki

    gooki Active Member

  10. gooki

    gooki Active Member

    Carlos Ghosn had been planning a merger between Renault and Nissan.

    Source
    https://asia.nikkei.com/Business/Ni...-planning-Nissan-Renault-merger-before-arrest
     
  11. Domenick

    Domenick Administrator Staff Member

    It gets weirder. Now they are holding him for an extra 10 days. Meanwhile, Renault hasn't fired him, though they have named an acting CEO.

    The Japanese justice system has a reputation for an extremely high conviction rate, even if they are seen as soft on white-collar crime by Japanese nationals. A lot of this stinks of a power struggle within the Alliance and may possibly destroy it. Feels like some within Nissan (and possibly the government) would prefer the company stay more "Japanese" than successful. Or, possibly, didn't realize the jeopardy they were putting the company in with this move.
     
  12. gooki

    gooki Active Member

    Reports indicate Ghosn may have taken ownership of at least one of the properties in question.

    https://asia.nikkei.com/Business/Nissan-s-Ghosn-crisis/Ghosn-picked-pricey-homes-himself-sources-say
     
  13. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    I was shocked to see the news yesterday about Ghosn being arrested. I don't have an informed opinion about his guilt or innocence, and I am firmly in favor of the American ideal that people should be presumed innocent until proven guilty. Being convicted in the "court" of the news media does not count.

    But whatever the outcome, it's not going to be good for Nissan.
    :(
     
    Last edited: Nov 21, 2018
  14. gooki

    gooki Active Member

    Some more news.

    Ghosn denies charges.
    Details about the under reporting related to future compensation after retirement, and stock appreciation
    Greg Kelly also denying any wrong doing.
    Nissan preparing to sue Ghosn. Should make things a bit more public.
    Nissan apparently funded more than the two properties reported earlier.
    Source:
    https://asia.nikkei.com/Business/Ni...san-chairman-Ghosn-denies-understating-salary
    https://asia.nikkei.com/Business/Nissan-s-Ghosn-crisis/Ex-Nissan-official-says-he-did-nothing-wrong
    https://asia.nikkei.com/Business/Ni...-to-report-70m-in-deferred-pay-sources-allege
     
  15. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    The sources allege that from fiscal 2010 to fiscal 2017, Ghosn arranged to have about 1 billion yen a year paid to him later on, such as after he retires from the company. Prosecutors apparently think he needed to cite this compensation in securities reports each year if the payments by Nissan were definite, even if he had not received the money yet.
    I don't know what the tax laws are in Japan, but not only doesn't this appear to me to be a crime, it's hard for me to understand why anyone would be expected to report future compensation; income which they have not yet received and therefore shouldn't owe any taxes.

    In addition to the alleged underreporting of cash compensation, Ghosn is accused of omitting from securities filings roughly 4 billion yen in stock appreciation rights received in the four years through March. Stock appreciation rights granted to other directors have been included in the securities reports.
    4 billion Yen is about $35.4 million USD.

    While this appears to be a real violation of income reporting for tax purposes, it's certainly possible that Ghosn himself wasn't aware of this. I think it would be normal for someone with complex personal finances and a top executive compensation package to leave tax reporting to accountants.

    The idea that Ghosn was actually arrested for what seems to be, at worst, tax reporting irregularities, certainly seems to support the assertions of those who say this is merely a power play by Japanese executives against an executive who isn't Japanese-born.

    But whatever the truth, it's a black eye for Nissan.
    :(
     
  16. gooki

    gooki Active Member

    From my understanding of Japanese tax law, reporting income for taxes is separate to the securities filing.
     
  17. gooki

    gooki Active Member

    The big issue for Nissan's current board of directors is the significant stake Renault have (43.4%).

    Renault won't need much shareholder support to initiate a clear-out of Nissan's board of directors should Ghosn comes through this innocent, and still have the backing of Renault.
     
  18. gooki

    gooki Active Member

    Looks like Ghosn will be spending another 10 days in detention.

     
  19. gooki

    gooki Active Member

    Interesting.

     
    Domenick likes this.

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