Ghosn speaks out for first time since arrest

Former chairman of Nissan and Mitsubishi denies heaping personal losses on to Nissan amid US investor's claim that both firms are mistreating shareholders

In this Oct. 6, 2017, photo, Renault Group CEO Carlos Ghosn listens during a media conference at La Defense business district, outside Paris, France. The arrest of Nissan’s former chief executive Ghosn has raised doubts over the future of the alliance among automakers Nissan, Renault and Mitsubishi Motors that he helped forge. Such alliances wax and wane over time, but have grown in importance as companies develop electric vehicles, net connectivity and artificial intelligence for autos. (AP Photo/Michel Euler, File)
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Carlos Ghosn, the embattled former chairman of Nissan, on Wednesday denied reports that he passed on personal trading losses to the car maker, the first formal comment from the executive who is detained on numerous allegations of financial misdeeds.

Mr Ghosn acknowledged consulting Nissan about the collateral related to the contract, but did not transfer the losses to the automaker, said Motonari Otsuru, a lawyer representing the former chairman. Mr Otsuru, the former director of the same Tokyo prosecutors’ office department that is now investigating Mr Ghosn, spoke to Bloomberg News after meeting with the detained official.

Local media reported on Tuesday that Mr Ghosn may have passed ¥1.7 billion (Dh54.7 million) in personal investment losses relating to a derivatives contract on to the company in 2008.

The comments are the first attempt by the 64-year-old Mr Ghosn to defend himself after the car maker said he misused company money for personal matters and understated income. He was arrested in Tokyo November 19 and Japanese media have since then published details of the alleged violations on an almost daily basis.

Ghosn, who hasn’t made any public statements since he was detained, denies wrongdoing in connection with the allegations, broadcaster NHK reported on Sunday.

Nissan’s auditor had repeatedly questioned transactions at the heart of allegations of financial misconduct by Mr Ghosn but Nissan said they were proper, a person with direct knowledge of the matter said on Wednesday.

Ernst & Young ShinNihon questioned Nissan's management several times, chiefly around 2013, about purchases of overseas luxury homes for Mr Ghosn’s personal use and of stock-appreciation rights that were conferred on him, Reuters said.

But the car maker said the transactions and financial reporting were appropriate, the source said.

The revelation shows Nissan and its auditor were discussing the transactions, in apparent contrast with Nissan’s contention that the alleged misreporting of benefits for Mr Ghosn was masterminded by him and a key lieutenant.

A spokesman for EY ShinNihon, the Japanese affiliate of global accounting firm Ernst & Young, said he could not comment on specific cases. A Nissan spokesman declined to comment.

Nissan has largely pinned the blame on Mr Ghosn and Greg Kelly, a former representative director who was arrested along with Mr Ghosn on the same allegations.

Nissan and Mitsubishi Motors removed Mr Ghosn as chairman in the wake of his arrest. The French member of the three-firm alliance, Renault, retains him as chairman and CEO.

The latest news of the scandal comes as Jamie Rosenwald, who runs the $4 billion hedge fund Dalton Investments, said shareholders are being mistreated after Nissan ousted Mr Ghosn.


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Mr Rosenwald, who has invested in Japan shares since 1972 and campaigned for the country’s firms to better treat investors, according to Bloomberg, said Mr Ghosn’s arrest and removal amount to a “palace coup” by Nissan, and that shareholders are being ignored.

“Japan Inc is fighting back” against Renault’s desire to take full control of Nissan, Mr Rosenwald said. “If a ‘real’ owner of Renault existed rather than it being an ‘SOE,’ the owner would immediately call a special shareholders meeting and throw the entire Nissan board out.”

Mr Rosenwald has prior experience clashing with vested interests in Japan. Before the financial crisis he failed in two bids to take Japanese companies private, while in March last year he urged Shinsei Bank to buy back ¥200bn in shares, a move that put him on a collision course with the Japanese government, the largest holder of Shinsei’s stock.

On Nissan, Mr Rosenwald said he had no doubt that Mr Ghosn’s arrest and firing were linked to attempts to merge the Japanese car maker into the organisation of Renault, its largest shareholder, a claim that Nissan’s management has denied. The US investor says he doesn’t own shares in Nissan but is following the events from a corporate governance perspective.

The board of Mitsubishi Motors Corp., where Ghosn also served as chairman, ousted the 64-year-old Franco-Brazilian executive on Monday, following Nissan’s decision to do so last week. Mr Rosenwald said the decision by Mitsubishi and Nissan to remove Mr Ghosn as chariman of both were made without regard for investors.

“Shareholders of Nissan were saved by Ghosn’s actions in 1999-2000,” he said. “And they are now being ignored in the fight.”

The US investor called on the French government, which owns 15 per cent of Renault, to step in to protect shareholders’ interests. French Finance Minister Bruno Le Maire on Sunday called the alliance “indispensable” and said he wants to strengthen it.

“I am sure that Japan Inc would like Nissan to buy out Renault so they can go their separate ways," Mr Rosenwald said, “but really isn’t it the duty of the President of France, or at least the Finance Minister” to “stand up for shareholders?”