Business Essentials for Professionals


Ghosn Inflated His Pay Using A Nissan-Mitsubishi Venture

Ghosn Inflated His Pay Using A Nissan-Mitsubishi Venture
Lawyers of Nissan and Mitsubishi have alleged that the former and now fugitive chairman of the two companies - Carlos Ghosn, has utilized a joint venture of the two auto majors to inflate his pay which effectively allowed him to cover up a cut into his declared wages as well as to get financial cover for a personal tax debt.
Ghosn, architect of the alliance between the Japanese auto companies Nissan and Mitsubishi with the French auto manufacturer Renault, was arrested in Japan in November of 2018 over charges of financial misconduct. He was granted bail after about a year in custody following which he led to Lebanon last December.
Ghosn has refuted the charges which included any wrongdoing in the manner he was compensated.
The payments made to Ghosn form the Dutch-based joint venture of Nissan and Mitsubishi are at the centre of the controversies. Both the Japanese companies have been opposing the payment that they alleged had been made to himself by Ghosn without any knowledge of the boards of the companies. The money under the scanner amounted to  7.3 million which comprised of salary and bonus components.
That compensation had been awarded to himself by Ghosn in order to fill up a gap in his pay because of a cut in his earnings declared by Nissan, alleged lawyers for the tow Japanese companies in new arguments submitted to a Dutch court.
Ghosn had accepted the cut in pay in 2017 when he had vacated the position of Nissan CEO. He had however argued many other honchos in the auto industry were paid much more than what he had got. But the wages of Ghosn were constantly under the public scanner in Japan and France.
After relinquishing the post of Nissan CEO, Ghosn continued to be the chairman of Nissan as well as that of Renault.
The allegations of unknown or unjust payments were unfounded, said representatives of Ghosn's legal team.
"We don't dispute that Mr Ghosn received a good salary", attorney Roeland de Mol said. "But he had the heavy task of getting French and Japanese companies to cooperate. He didn't retire to go play golf after he stepped down as Nissan CEO."
These new allegations over compensation against Ghosn emerged during a hearing in a court in Amsterdam which is going on in regards to a case filed by Ghosn against his unlawful dismissal by the two Japanese auto companies.
Ghosn has alleged that Dutch labor laws had been violated by Nissan and Mitsubishi by dismissing him and has demanded a compensation of 15 million euros in damages from two companies.
Claims of evidence existing to prove that Ghosn mad the alliance pay as personal French tax debt of 498,000 euros in 2018 were made in the court by Nissan-Mitsubishi lawyer Eelco Meerdink. Meerdink said that initially, the money was paid by Renault which was later refunded by Ghosn after he had received a payment from the Nissan-Mitsubishi joint venture for the same amount.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc