A Japanese government agency recommended a 2.4 billion yen fine for Nissan Motor Co. Ltd. because the automaker underreported the compensation of Carlos Ghosn, the automaker’s former chairman and CEO, for four years.
The fine, about $22 million, is the second-largest ever assessed in Japan behind the 7.3 billion yen penalty given to Toshiba Corp. in 2015, according to Reuters.
The Securities and Exchange Surveillance Commission, Japan’s watchdog group for its securities markets, said the fine covers from April 2014 to March 2018. Due to the statute of limitations it cannot be longer, SESC officials told the media.
The SESC, Japan’s version of the Securities and Exchange Commission in the U.S. although it cannot bring charges against companies, reports to the Financial Services Agency, Japan’s financial regulator, which will make a final decision on the fine.
“We express deepest regret to stakeholders for any trouble caused,” Nissan said in a statement, noting it took the recommendation seriously. “We will continue efforts to strengthen governance and compliance including ensuring accuracy of corporate information disclosure.”
Ghosn was arrested in November 2018, taken from his private jet just after it landed when he arrived in Japan for meetings with Nissan officials. Ghosn who was charged with understating his salary. He has consistently denied the charges, maintaining his innocence.
The automaker has been struggling seemingly since the incident occurred. Sales have been the decline steadily and it has quarterly earnings have been missed targets while the company restated its earnings forecasts twice.
Now Nissan has a new chief executive, Makoto Uchida, who pledged on his first day to “regain trust” and “restore business performance” to the automakers. Uchida had been serving as the automaker’s head of Chinese operations
Though Uchida declared that “Nissan is on the right path to recovery,” he acknowledged that “it might be a gradual process.”In his comments to Nissan employees, Uchida appeared to be signaling a desire to mend fences, saying his goals “will include the building of alliance partnerships.”
It is unclear, at this point, if he will continue his predecessor’s push to have Renault reduce both its 43.4% stake in Nissan and its ability to control key executive and board appointments.
A key attribute of Uchida, sources said, is his ability to view things from a more global perspective than traditional Japanese executives like Saikawa. The Reuters news service quoted one insider describing the incoming chief executive as a “foreigner with a Japanese face.”
His impact is already being felt in North America where he plans to down its plants for two days hoping to help the automaker recoup some costs. The company has been trying to cut costs after its profit plunged this fiscal year. A stronger yen has combined with falling sales in China and the United States, pushing the automaker to cut its forecast for operating income to an 11-year low.