Nissan books US$84 million Ghosn-related charges, cuts outlook

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

YOKOHAMA: Nissan Motor said it had booked around US$84 million in charges related to under-reported compensation for ousted chairman Carlos Ghosn, and slashed its annual profit outlook on weaker global sales.

Ghosn, arrested and detained in Tokyo since Nov 19, has been indicted in Japan on charges of under-reporting his salary at Nissan over 2010-2018. He has denied the deferred pay was illegal or required disclosure.

Nissan said on Tuesday that it had recognised around 9 billion yen (US$84 million) in additional expenses linked to payments to Ghosn.

The statement was part of Nissan’s quarterly results announcement, its first since Ghosn’s November arrest on allegations of financial misconduct.

The scandal at Nissan comes at a time when the automaker, together with its domestic rivals including Toyota Motor is struggling with sluggish sales and falling profit in North America, a key market.

Their margins have been squeezed as they resorted to steep discounts to drive up demand in a competitive US market where sales have plateaued near record highs.

The Japanese automaker cut its full-year profit forecast to 450 billion yen from 540 billion yen previously on persistent weakness in global sales.

Nissan based its new forecast on an assumption that the yen will trade around 110.6 yen to the US dollar through March 31, from a previous forecast for 105 yen.

It, however, posted a 25.4% rise in third-quarter operating profit on lower discounting in the United States.