Nissan Chairman Ghosn arrested over financial law violation

Out of all the CEO's at all the Japanese companies in Japan, Carlos, a foreigner, is brought up on charges by his own company. This is just too coincidental, it is obvious that Nissan wants him out and this was the only way they could figure out how to do it. Basically they squeezed everything they could from him and are now they want to go back to doing the Japanese way.

As a Japanese, we all highly respect him and think he is the best foreign CEO in Japan. He made bankrupt Nissan to the number 4th car company in the world and merged Renault and Mitsusbishi Motors, 3 car companies to emerge all as stronger companies. Heck not even we can pull put bankrupt companies properly. He deserves respect were respect is due.

The people behind the scene in my opinion seem racist, why overnempaize his race and who exactly is the culprit? Wouldn't the accountants of the companies be responsible or the CFO for that matter.. Bit vague on the details on what's going on, either way he still had our respect and the Japanese people's respect as one of the best CEO's and the contributions he did to Japan and Japan Inc.

Crime is crime whatever, so law can't ignore it, even if he saved NIssan. Probably some countries would let him go free in secret in the same/similar crime.

Extremely strong suspicion that Ghosn appears to have done something wrong, but it all seems to be moving so rapidly - this in the land where action against CEOs or Presidents occurs at less than snail pace.

For Example - Takata Corps Shigehisa Takada, chairman & CEO, remained at the helm of his prominent family company for years, even as the evidence of 100s of injuries and deaths due to faulty products began to build.

In this case Ghosn who saved $billions for the companies and thousands of jobs etc etc gets speared by his own at the first hint of wrong doing. And the prosecutors are jumping on this like flies to carrion.

No doubt he must face the music if he's stuffed up, but all looks like a whistle blown in-house attempt to oust him asap.

More interesting days ahead.

Olympus British CEO Michael Woodford who was also a whistleblower for his own companies flaws, the emphasis that he's British in every second line practically, is quite racist.

In case none of you remember :

https://en.wikipedia.org/wiki/Olympus_scandal

A salary like that and he still had to steal?

Prosecutors better know what they are doing, this is going to put a global spotlight on Japan's quasi justice system.

This is very stupid on the Governments part. There would be no NISSAN if it wasn't for him.

This is a very, very dangerous route of thought to be on. The premise behind it is that people can do things that exempt them from having to follow the same laws as the rest of the people. When you have law that only applies to some and not others, it creates disaffection, that is a poison in society. People lose respect for the rule of law, and have no confidence in the strength of law in their country.

Well done to the whistleblower who exposed this fraud, thankfully we won't ever know his identity. This is a warning to all the super rich and powerful that they aren't above the law

Why would someone so wealthy need to underreport his income and divert company funds? Would he have faced a massive tax bill otherwise?

Ghosn's income is stated in Nissan's annual reports. If the figures in the report were incorrect the accountants and board at Nissan are all to blame, not just Ghosn.

I'd also like to know more about the "misuse of company funds for private purposes". It had better be something more than e.g. using a company car at the weekend.

The usual response in these cases is a token salary cut for a few months. How many employees did Nissan fire for faking emission data? None at all. However, Ghosn isn't Japanese and is therefore held to a higher standard than the locals.

We say its him who rescued Nissan. In my university, we studied deeply. Talked to lots of insiders and those restructured. The public doesn't have the whole pic. He deserve some but not all the credit. The Japanese needed an outsider face to do all the firings and restructuring. Gaijin was the perfect executioner

Glad to hear this criminal is arrested. How astonishingly disrespectful and spiteful he must be to his own employees at Renault and Nissan.. He is done

I am going to reserve judgement until I see more info, article doesn't make it clear if they are investigating Nissan's management led by Ghosn or whether it is after him as an individual tax payer or perhaps both & more...………

With all the fraud I have seen & read about for years here done by locals & the vast majority totally getting away with it with the exception of the odd fines, penalties.....

This will be interesting to say the least!

Wow! Let’s not forget he pulled Nissan out of the ashes of his predecessor’s failure. Nissan was facing bankruptcy when he took over.

No one is forgetting that, but it you commit fraud, particularly if it is personal tax evasion, you must face the law - you cannot expect a pass.

Gaijin was the perfect executioner

if that what it takes then so be it, the problem is if many Japanese CEO had the nads to cut staff and costs when it was needed and not have to worry about the loss of face and standing in society then many of those bankrupt or bailed out J companies wouldn't be in the situation they see themselves today. Cultural norms is the biggest hindrance to progress in many countries, especially Japan.

Why not keep it going and not get so greedy? I'd be insanely satisfied.

thats the problem with greed , too much is never enough

WtfJapan:

I don't see how firing workers and raising unemployment is a good thing. Cutting costs could be done by many avenues, including salary reductions (with company housing for those that needed it) - himself included. If I see my boss saying we need to take a pay cut (talking about employees not himself) while he makes more than 10x lowest paid worker...yeah, issue. If he were to make no more than 10x lowest paid worker the more respect and cooperation.

Err why would a Chairman file his own taxes?? again if you live here in Japan, the company DOES YOUR TAX FOR YOU..

I do live in Japan and have for almoat twenty years and am aware that my employer does my taxes.

I also am way more familiar with the legal issues surrounding executive compensation in Japan than you are. My point is that the mere fact that the company does taxes for its employees is completely irrelevant to what is alleged to have happened here.

First, this is not a tax law case, he hasn’t been charged with tax evasion. He has been charged with falaifying reports filed with the TSX, which are required under Japanese securities regulations. The people who do your taxes for you at your company have nothing to do with compiling and filing those reports, hence my comment that your point is completely irrelevant.

These reports are compiled by the board of directors, which Ghosn of course is the chairman of. Technically the corporate auditors are supposed to check the accuracy of those reports, but anybody who knows Japanese corporate governance will tell you that the board of auditors is a deeply disfunctional monitoring mechanism that can easily be evaded by powerful executives who are trying to conceal something.

Beyond that I can’t comment much because the details of the alleged fraud have not been made public. The board will have to conduct an investigation into this and that will have to be made public since it is a listed company after which we will know the details of what transpired.

It is racist, why every other scandal, there is just the fake bow, slap on the wrist and tomorrows a new day IF you live here in Japan and turned on the TV, youll here the over exaggeration of the 'foreign' CEO

Olympus scandal: 11 executives, all Japanese, arrested.

Alot of the sophisticated financial alchemy that's been written into the tax codes in other countries just doesn't fly here in Japan. I'm guessing someone at the tax office called bs on a Cayman Islands shell company or discretionary trust full of deferred stock options that was destined for Carlos once he leaves Japan for 183 days out of the tax year.

https://twitter.com/y_shida/status/1064453980816760833

this is internal coup d'état.

Well I’m sure all he has to do is hold a press conference, apologize, promise not to do it again and bow deeply ... wait a while and...oh nevermind he is not Japanese.

Does he actually do his own taxes? Wouldn't taxes be done by Nissan accountants? He is, after all, a full time employee, right?

The guy loves Japan, he's been here beyond 15 years almost, wrote many books on Japan if you check Amazon Japan, he brought 3 companies out of failure and more recently Mitsusbishi Motors merger this year. Why would he have any hidden agenda exactly?? As another person mentioned international spotlight will be on this and the Olympics is around the corner so looking like the isolation we once we're in would like even more silly

AND yes all Japanese companies do your taxes for you and especially for a CEO.. so this is clearly jealousy of power at play. I hope he sues the government and others for defamation

When you're making billions and billoons of yen why not just properly state hour income?

You're living beyond comfortable and living "the Life".

Why not keep it going and not get so greedy? I'd be insanely satisfied.

I don't see how firing workers and raising unemployment is a good thing.

no its not a good thing , but when management put off the hard decisions for too long this becomes the only option from saving companies from bankrupsy , happened with Nissan and many other J companies after the bubble. Ghosn was brought in to do what other Nissan CEOs couldnt.

Regardless of the motives behind the whistleblowing, if he under-reported his income by a significant amount then that's on him. Coup d'etat or whatever cant be used as a reason for this. Its not a witch hunt when the person is actually a witch.

Shareholders and shareholders meetings would obviously see every single yen spent and for all that info of a person managing those three massive companies is all within shareholders domain.. Hence why this garbage is very strange

This is specifically why he was arrested: he didn’t report his earnings accurately to the shareholders. Shareholders are mostly outsiders who can be misled by insiders who break the law.

Under Japanese corporate law, the remuneration of the board of directors has to be approved by the shareholders meeting. They just vote a limit for the entire board rather than for each individual director. But in Ghosn’s case they would know what he was officially being paid because companies must disclose all compenasation paid to anybody paid more than 100 million Yen per year.

So he, and collaborators, would have broken the law at several steps of the reporting chain, not to mention the tax violations that likely also occurred.

Ghosn has been the highest paid Japanese executive at any company for most of his tenure and his pay packages, even the legitimate amounts, represented the worst aspects of US style executive pay excess and inequality. Good riddance I say.

Japanese people are very much shocked about the news as someone here says that Japanese respected Ghosn. Usually, financial wrongdoings do not result in abrupt arrest and detention of the suspect. If Ghosn admits his wrongdoings and pay back the losses of the company and the amount of tax evasions, he will be released soon. But if he denies, the investigation will prolong, Japanese media says. The sudden arrest may have happened because his wrongdoings continued not just one or two years but for many years.

company funds for personal purposes

Gone

I am really angry Ghosn brought shame to great Japanese companies, If this is true. It will take many years for Nissan and MMC to recover its image.

*Has our respect

The richer a person becomes, the greedier the person becomes. He used company money to build his house.

Hypocrite.

Cyclists Don’t Respect Rules said Nissan Boss Arrested on Suspicion of Salary Fraud

https://www.forbes.com/sites/carltonreid/2018/11/19/cyclists-dont-respect-rules-said-nissan-boss-arrested-on-suspicion-of-salary-fraud/#7205661c66ee

as stated earlier, the accountants and CFO deal with all intenral finances and anyone working in Japan would know, the company does all your taxs for you and especially someone of such a position..

He is the chairman of the board for crying out loud. The company does his taxes? He is the company!

There are about a million ways in which someone in his position can siphon off corporate cash without it being disclosed provided he had aome collaborator willing to help him cover it up, this is what about half the rules in corporate and securities regulation are meant to protect against because it happens so often.

so it is an obvious racist thing

Based on what? There are zero facts in the article to base this on and if racism was motivating it he probably wouldn’t have lasted for nearly two decades.

His books are worth reading if any of you are into business :

https://www.amazon.co.jp/カルロス・ゴーン/e/B004LT6MIU/ref=sr_ntt_srch_lnk_3?qid=1542623742&sr=8-3

Didn't he take a pay cut from a billion yen to just 735 million last year?

I am curious about the stock price of Nissan tomorrow morning. Some say it will fall sharply while others say it will be limited because Nissan is getting rid of two big money eaters - Carlos Ghosn and Greg Kelly.

Serrano is correct he took pay it, wouldn't their accountants do that on behalf of their CEO? CEO's don't file their own taxes, especially when he's running 3 international companies..

*Pay cut

Wow! Let’s not forget he pulled Nissan out of the ashes of his predecessor’s failure. Nissan was facing bankruptcy when he took over. He initiated the rebirth of the fairlady and many domestic models for tradesmen use. Perhaps he has diddled a few million yen, but it’s a truck he learned from his Japanese counterparts. I fear that, if he goes down, Nissan cars will go down will him.

Considering Renault is the main shareholder of all three companies combined, so it is not technically a 'Japanese' company as Nissan once was back in their hey day of the 60s-80s, (prior to be being bankrupt twice) I would imagine this will turn into a possible diplomatic row with France soon..

If theguy worked hard to make the companies as powerful as they are now when they were in their darkest days of bankruptacy, why would he be their knight? usually old CEOs have no idea what they are doing, look what happened to Sharp which is now Taiwanese and Toshiba is on the verge of collapsing..

all due to bad management.

I agree, but you are saying he is guilty in the court of public opinion.

No.... I wasn't saying that, and I haven't said that. I actually never said anything about his guilt or innocence whatsoever, in any court, be that legal or public opinion. What I said was that the line of thought that the government was stupid to arrest him because there would be no NISSAN if it wasn't for him is very dangerous, as:

The premise behind it is that people can do things that exempt them from having to follow the same laws as the rest of the people. When you have law that only applies to some and not others, it creates disaffection, that is a poison in society. People lose respect for the rule of law, and have no confidence in the strength of law in their country.

To be arrested...so is this a notice for him to try and run away?!

Well, folks better get ready for the flood of news programs and wide-shows about this one. I'll bet the next few months (destroy the new year too) are all going to be about Nissan and folks are going to come out of the woodwork after him.

Violation of financial law? This is a case of tax dodging. Prosecutors have been checking documents of tax havens with international cooperation. Of course inside informers are involved.

following a whistleblower report,

Aka a snitch 'appointed' by Nissan top J execs/CEO. No one is going to make me believe that a regular J employee would ever dob in his -even dodgy- boss.

He's going to need a couple of Lawyers I guess.

He turned around Nissan by laying off workers and closing factories while paying himself big bonuses. If convicted, he would be able to save even more money by living rent-free in prison.

Err why would a Chairman file his own taxes?? again if you live here in Japan, the company DOES YOUR TAX FOR YOU..

Not suprising as in France there is a series of allegations and rumours surrounding Ghosn as well, it seems the French also particularly fond of him as well.

CrickyNov. 19 09:18 pm JSTProsecutors better know what they are doing, this is going to put a global spotlight on Japan's quasi justice system.

A global spotlight on Japan's justice system is no bad thing. And judges will actually have to act like judges.

Ghosn may or may not be guilty of these crimes, but I would absolutely love to know who the original whistleblower was... and what their interests are in the whole thing.

They've just started calling him "Ghosn Yougisha" on TV. He's done. If this was the goal, they've accomplished it.

So far he got arrested for tax evasion and personal profit from company.

I wonder why he had to be arrested, while he should be put on trial. He is no criminal (i.e do a crime). It looks like a Madoff or Kerviel show.

I want him down only if evidence show it. Please show full evidence if at disposal !

It seems very very very weird that head of companies which put people's safety at risk are not immediately arrested while foreigners are ...objectively speaking.

Amusing to get down voted for reporting truths.

Shareholders and shareholders meetings would obviously see every single yen spent and for all that info of a person managing those three massive companies is all within shareholders domain.. Hence why this garbage is very strange

Hope he can afford a good lawyer.

"Woodford, former CEO of Olympus and whistleblower of Olympus scnadal in 2011 stated his concerns that, far from learning from the scandal, Japan's response was to become even more secretive and unsupportive of change in areas highlighted by the scandal".

You got your answer.

Not enough specifics.

If he under reported his remuneration the company should know about this due to the way taxes are handled in Japan. Also if he knowingly allowed us remuneration to be under reported then he is stupid, especially considering the amount and his position.

I would like more details as to what he used the company funds for.

I am a huge supporter of Japan and intend to stay here but I am willing to bet that he did nothing that is not being done by other Japanese executives.

And Mr. Ganbare: Japanese companies are doing a good job of bringing shame upon themselves (Kobe Steel, Mitsubishi, Tsuyoshi Kikukawa and Olympus, on and on and on....

The remuneration issue to me sounds strange to me (again since Japanese companies usually take care of the taxes of the employees and executives)

Arresting him at this stage of the investigation does seem a bit over the top.

By the way, I know too about corporate governance in Japan too and can tell you how bad bad bad it is.

People lose respect for the rule of law, and have no confidence in the strength of law in their country.

I agree, but you are saying he is guilty in the court of public opinion.He was only arrested. I think he will probably just fade away into the sunset and you won't hear much more about. France has his back, you can be sure of that.

This is very stupid on the Governments part. There would be no NISSAN if it wasn't for him. Can you imagine the hell that man went through to rebuild the most backwards thinking car and production company in the world? Remember, he fired everybody and started over in the beginning. The Japanese business community couldn't handle all his bold moves until the company started making a profit. Now that the turnaround is complete the Japanese want their company back and want to get rid of the foreigners that saved their arses so they can now take credit for all their "Japanese hard work and efforts" What Ghosn did was short of a miracle.