Ghosn Shifted $15 Million Trading Loss To Nissan During Financial Crisis: Japan Times

It's been more than a week since Tokyo prosecutors dragged former Nissan-Renault-Mitsubishi alliance leader Carlos Ghosn off a private jet and locked him in a cell in what is by all accounts a drab, cramped detention facility in Tokyo. And yet, nobody seems to know the details of the charges facing Ghosn. Not Nissan, not the Japanese press, and not even - according to the Financial Times - Ghosn himself.

Thanks to Japan's opaque legal system, prosecutors still have another two and a half weeks to either charge Ghosn or let him go - until then, they're under no obligation to release any details about the nature of Ghosn's alleged crimes. But that hasn't stopped details of his alleged wrong doing from trickling out in media reports. So far, we know Ghosn is suspected of underreporting his income at Nissan by as much as $100 million (initial reports put the number at $44 million). Some of this underreporting was tied to performance-based stock awards, and some tied to compensation he would receive when he retires. It's also believed that he helped orchestrate the funneling of company money into a Dutch subsidiary that purchased "corporate housing" in Brazil and Lebanon. The housing turned out to be luxury homes to be used by Ghosn and his family. He's also suspected of using Nissan's private jet for personal trips and vacations, flying to countries where Nissan had no significant operations.


And now we can add one to the list of suspected crimes, as the Japan Times reported Tuesday that Ghosn is suspected of dumping some $15 million in trading losses from his personal investments on the automaker in 2008 during the depths of the financial crisis. Nissan reportedly shouldered the losses when Ghosn couldn't secure adequate collateral. One of Japan's securities regulators is aware of the trades, and is looking into the allegations.

Here's the Japan Times:

Ousted Nissan Motor Co. Chairman Carlos Ghosn is suspected of shifting some ¥1.7 billion ($15 million) of losses from personal investments to the automaker in 2008, adding to allegations of financial misconduct against him, sources said Tuesday.

According to the sources, the Securities and Exchange Surveillance Commission was aware of the alleged misconduct in relation to Ghosn’s derivatives trading and notified the bank involved in the transaction of the possibility that he had committed an aggravated breach of trust.

The SESC told The Japan Times on Tuesday it does not comment on specific cases.

Nissan shouldered the losses incurred amid the global financial crisis in 2008 after Ghosn could not secure adequate collateral, the sources said.

With Ghosn out, the first stirrings of a civil war have emerged on Nissan's board as directors aligned with Nissan's alliance partner Renault, and who are still largely sympathetic to Ghosn, are fighting for control with Nissan CEO Hirohito Saikawa. But Saikawa may yet have some explaining to do, as some have pointed out that Ghosn's alleged underreporting and use of the jet and Nissan-owned houses wouldn't have been possible without the knowledge and approval of dozens of other Nissan employees. So why are Ghosn and former director Greg Kelly the only two being detained?