Nissan special committee says carmaker suffered from poor governance

The Nissan logo is displayed at the North American International Auto Show in Detroit, Michigan, US, Jan 15, 2019. (Reuters pic)

TOKYO: A special committee set up by Nissan Motor Co to examine the root cause of alleged financial misconduct by ousted chairman Carlos Ghosn said it appeared that the Japanese carmaker suffered from poor governance procedures, including director compensation.

Ghosn has been charged with three counts of financial misconduct and has been detained in Tokyo since his arrest on Nov 19. Ghosn denies the charges against him, which include understating his salary for a total of eight years and temporarily transferring personal financial losses to Nissan’s books.

After the special committee’s first meeting, former judge Seiichiro Nishioka, who co-chairs the committee, said the group plans to meet three or four times before issuing recommendations to Nissan’s board on how to improve corporate governance.

The group comprising three Nissan external directors and four third-party members expects to make recommendations to Nissan’s board in March on how to tighten its lax governance and approval processes for matters including director compensation and chairman selection.

Nissan and partner Mitsubishi Motors have been conducting their own internal investigations into alleged wrongdoing by Ghosn.

On Friday both accused him of improperly receiving US$9 million in compensation from a joint venture (JV) between the two automakers, raising the possibility that the former boss of the Nissan-Renault alliance could face a fresh charge of embezzlement.

Separate internal investigations have found evidence that a small group of people at both companies helped to carry out or approve transactions including secret compensation and payments on Ghosn’s handful of residences, people with knowledge of the matter have told Reuters.