U.S. securities commission probing Nissan over executive pay
TOKYO, Kyodo - Nissan Motor Co. said Monday it is being investigated by the U.S. securities watchdog over disclosures of executive pay, adding to the woes of the Japanese automaker, which has seen its former chairman Carlos Ghosn arrested over alleged financial misconduct.
The U.S. Securities and Exchange Commission is looking into the disclosure practices related to the remuneration of senior Nissan officials in the United States. Nissan said that it is "cooperating fully" with the investigation, without elaborating.
The latest development came as Tokyo prosecutors indicted Ghosn and Nissan on charges of underreporting billions of yen of the former chairman's remuneration in securities reports presented to Japanese regulators over the eight years through March 2018.
If the U.S. securities watchdog recognizes any improper conduct, it will certainly tarnish the Japanese company's image and possibly lead the firm to rethink its way of corporate governance on a global scale.
Nissan cannot afford any negative stories at a time when it is facing stiff competition from other carmakers in the United States, an important market for the Japanese company. Its sales of new cars in the United States dived 9.1 percent in the six months to September last year as compared to the same period a year earlier.
Nissan is currently trying to improve its corporate governance, with CEO Hiroto Saikawa saying that Ghosn had too much power during his nearly two decades of leadership.
The company is also trying to manage its alliance with its partner Renault SA for whom Ghosn was the chairman and CEO until Thursday.
Nissan and Mitsubishi Motors Corp., the other partner in the alliance, removed Ghosn as chairman shortly after his arrest.
Ghosn, 64, was arrested in November after the company conducted an internal investigation over allegations of misconduct at the company.
The former chairman has been accused of understating around 9 billion yen ($83 million) in remuneration in Nissan's financial statements for eight years.
He is also accused of transferring personal losses worth 1.85 billion yen from his private asset management company to the Japanese automaker's books in 2008 and causing damage to the company by having it pay $14.7 million to a Saudi businessman who had guaranteed him credit. (Kyodo)