Economy

Nissan and MMC 'confirm' Ghosn financial misconduct

Nissan and MMC 'confirm' Ghosn financial misconduct

Nissan and Mitsubishi said Carlos Ghosn received "improper payments" totalling 7.8m euros ($8.9m) from a joint venture between the carmakers.

A joint investigation found that Ghosn, ousted as chairman from both automakers, was compensated by the Netherlands-based JV without any discussion with two other board members, Nissan CEO Hiroto Saikawa and Mitsubishi CEO Osamu Masuko.

Nissan holds a controlling stake in Mitsubishi Motors.

Renault said in a statement its governing bodies were now "actively working to find the best solution for the future governance of the group, with a view to preserving the company's interests and strengthening the Renault Nissan Alliance". The board was spurred into action by Mr Ghosn's failure this week to win bail, which points to a lengthy incarceration and would prevent him from carrying out his roles at Renault, they said.

In November, Japanese auto maker Nissan, a Renault alliance partner, announced that Ghosn was arrested in Tokyo after an internal inquiry revealed his involvement in financial wrongdoings.

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Reuters last month reported that payments for some of Ghosn's residences were portioned out and processed through a Nissan unit in the Netherlands called Zi-A Capital BV and its subsidiaries, which initially had been set up to invest in technology start-ups.

The French government, Renault's biggest shareholder, has recently asked the automaker to choose a successor to Ghosn, who has been detained in Japan for almost two months, at the board meeting.

The 64-year-old business leader, indicted on charges of misreporting his corporate salary and using the company's money for his own purposes, saw his request for release on bail rejected by Tokyo court on Tuesday.

Ghosn has been charged with violating the financial instruments law by understating his remuneration in Nissan's securities reports as well as for aggravated breach of trust over the transfer of derivative losses from his private asset management company to Nissan's books. While the unexpected turn of events has created a climate of suspicion between the companies, Renault's new focus on a post-Ghosn reality may help relieve some of the tension.