Nissan accused of breaking law in Ghosn case

Galtero Lara
Febrero 12, 2019

Strains in the alliance between Renault and Nissan have been laid bare by the publication of a letter from the French carmaker's lawyers accusing its Japanese partner of breaking global law in its inquiry into Carlos Ghosn.

Nissan chief executive officer Hiroto Saikwawa has criticised Ghosn for holding too much authority and making decisions that were not in the best interests of Nissan, and the Japanese firm is seeking a review of the leadership structure, Bloomberg noted. The so-called deferred pay has emerged as a point of focus for Tokyo prosecutors who have indicted Ghosn for allegedly understating his income at Nissan by tens of millions of dollars.

Japan's second-biggest automaker projected an operating profit of 450 billion yen ($4 billion) for the year to March, down 22 percent from the previous year and 17 percent below an earlier forecast, hurt by a slowdown in global sales.

Nissan lowered the volume forecast for vehicles it expects to sell this fiscal year to 5.6 million from 5.925 million, reducing its expectations for all major markets, including China, the U.S., Europe and Japan.

Saikawa said Nissan will avoid trying to meet sales targets by using discounts, a strategy which has hurt its profitability in North America, the world's No. 2 auto market.

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"We are filled with regret about how we didn't see it and how we couldn't stop it", he said.

"So we want to raise our performance by improving the quality of sales", he added. Their margins have been squeezed as they resorted to steep discounts to drive up demand in a competitive USA market where sales have plateaued near record highs. Ghosn has said the payments were for legitimate services and Nissan didn't suffer losses.

The one-time charge of 9.2 billion yen to reflect Ghosn's yet-to-be-paid remuneration shows Nissan and Renault are set to feel reverberations from the scandal for a long time.

This provision refers roughly to the amount Ghosn has been charged of under-reporting in his 2010-2018 salary at Nissan.

Ghosn has denied all charges against him.

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