Tokyo prosecutors are expected to indict Carlos Ghosn and Nissan as soon as Monday over the carmaker’s alleged understatement of its former chairman’s pay in financial statements, according to two people with knowledge of the investigation.
The indictment will come three weeks after Mr Ghosn, the architect of the Renault-Nissan-Mitsubishi Alliance, was arrested and abruptly ousted from the Japanese car group he once rescued from the brink of bankruptcy.
Mr Ghosn and Greg Kelly, a close adviser to the former Nissan chairman and a board member at the carmaker, are also expected to be re-arrested on new charges in a process that will extend his stay in detention, according to one of the people.
Legal experts have suggested that Mr Ghosn could remain behind bars until after Christmas.
The expected charges come amid deepening chaos within Nissan, and rising concern that its chief executive, Hiroto Saikawa, is unlikely to escape the debacle unscathed.
Company officials do not believe Mr Saikawa was aware of Mr Ghosn’s alleged misconduct, according to a person with knowledge of the investigations.
Across the company’s global network, senior executives — especially those with close links to Mr Ghosn — have been cancelling planned visits to Tokyo because of the uncertainty over the investigations, according to people briefed on the situation.
Prosecutors have alleged that Mr Ghosn, with the help of Mr Kelly, understated his pay in financial statements by ¥5bn ($44m) over five years to March 2015. An internal investigation by Nissan, sparked by a whistleblower, has separately alleged that Mr Ghosn had made personal use of company funds.
The new charges are expected to cover the financial statements for the latest three fiscal years. In total, Mr Ghosn is suspected of accumulating roughly ¥9bn in deferred pay over a period of nine years, according to one person familiar with the investigations.
The ousting of Mr Ghosn, who remains chairman and chief executive of Renault, has rocked a 19-year-old global alliance that has been considered one of the most successful in the automotive industry.
Mr Saikawa singled out Mr Ghosn and Mr Kelly for being the “masterminds” of the alleged misconduct. But Tokyo prosecutors are expected to look into Nissan’s responsibility as a corporation in submitting falsified financial documents. They have recently questioned several Nissan executives, including Mr Saikawa.
The Tokyo District Public Prosecutors Office declined to comment. In a statement, Nissan reiterated that it identified “serious misconduct” related to the reporting of Mr Ghosn’s compensation.
“The company has been providing information to the Japanese Public Prosecutors Office and has been fully co-operating with its investigation. We will continue to do so,” it said.
If found guilty, Mr Ghosn could face a penalty of up to 10 years in prison, a fine of up to ¥10m, or both. Nissan could face a fine of up to ¥700m.
Mr Ghosn also faces allegations that he used non-consolidated subsidiaries in the Netherlands to buy personal residences in Beirut, Rio de Janeiro and Paris, according to people with knowledge of the investigations.
There are additional questions over a $100,000-a-year consulting contract signed between Mr Ghosn’s older sister and Nissan.
People familiar with Nissan’s internal investigation suggest more serious allegations could emerge that may lead to additional charges such as embezzlement or breach of trust as chairman.
Mr Ghosn’s lawyer could not be reached for comment but Mr Ghosn has denied to Tokyo prosecutors that he intentionally understated his pay in financial documents, according to Japanese broadcaster NHK.
Mr Kelly’s lawyer, Yoichi Kitamura, could not be reached on Friday. But Mr Kitamura has said previously that Mr Kelly believed he had done nothing illegal and the disclosure of Mr Ghosn’s pay was made in consultation with external experts.