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US SEC Inquiry On Executive Pay Ongoing Against It, Confirms Nissan

US SEC Inquiry On Executive Pay Ongoing Against It, Confirms Nissan
The U.S. Securities and Exchange Commission (SEC) is conducting an inquiry on Japanese car maker Nissan Motor Co Ltd into alleged financial misconduct in executive pay in relation to the ousted Chairman Carlos Ghosn over his alleged financial misconduct, acknowledged Nissan on Monday.
Ghosn was arrested in Japan on November 19 on charges of under reporting the remuneration that he received from Nissan for a number of years which ran into more than $80 million in additional compensation from the company between for 2010 and 2018 which he had arranged to be paid later. Ghoshn who had been removed as the chairman of Nissan has denied all the charges against him.
Japanese prosecutors also charged Nissan for under reporting his pay and the car maker has initiated a move to bring in sweeping changes in its corporate governance.
There was a report earlier in Bloomberg news about the SEC inquiry against Nissan over the manner of disclosure of executive pay by the company. According to the reports citing sources, the SEC is trying to ascertain whether Nissan had in place adequate checks and measures to stop any improper payments and whether the U.S. securities law was broken by the activity of the Japanese firm.
A separate report published in the Wall Street Journal had claimed that a request for information to Ghosn was also sent by the SEC. There have so far been no comments made from any of the representatives of Ghosn.
According to an acknowledgement from Nissan, an inquiry from the U.S. regulator was received by the auto maker. No other details were provided. There were no reactions available from the SEC on the issue.
According to experts, initiation of such an inquiry by the SEC does not necessarily mean that some wrongdoing by Nissan has been found by the regulator. However, the inquiry can result in civil cases against companies and their employees, or can come to an end without any charges. Typically such investigations can drag on for months and even years.
For example, the SEC had found last year that there was improper disclosure of around $3 million in perks by Dow Chemicals to its former CEO Andrew Liveries after an inquiry that went on for three years. The company later agreed to a settlement at $1.75 million. A similar inquiry led to industrial giant General Electric agreeing to settle the charges of it failing to disclose lavish retirement package of former CEO Jack Welch in 2004. Another country that was also charged by the SEC on similar charges was Tyson Foods Inc which also agreed to a settlement amount against a civil penalty for $1.5 million.
The United States has the authority to investigate any wrongdoing by Nissan because the Japanese company has American Depository Receipts traded on the U.S. over-the-counter market. Other Japanese firms including Toyota Motor Corp, have faced SEC inquiries earlier over safety issues.

Christopher J. Mitchell

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