TOKYO (Reuters) – Tokyo prosecutors indicted Nissan Motor along with its ousted Chairman Carlos Ghosn, domestic media reported on Monday, shifting the focus of the financial misconduct scandal to the Japanese automaker and its CEO’s responsibility.
Ghosn was arrested on Nov. 19 on suspicion of conspiring to understate his compensation by about half of the actual 10 billion yen ($88 million) over five years from 2010.
Nissan, which fired Ghosn as chairman a few days later, has said the misconduct was masterminded by the once-celebrated executive with the help of former Representative Director Greg Kelly, who was indicted along with Ghosn, according to the reports.
Nissan itself was indicted on Monday for making false statements in annual reports, they said.
Tokyo authorities also plan to re-arrest the two executives, sources said, declining to be named as they were not authorized to speak with media. Media reports have said the fresh crime was for three additional years of under-reported income. The two would then remain in custody without bail.
The Tokyo prosecutors’ office said it could not comment. Nissan said earlier that it was cooperating with the prosecutors’ office and providing them with information related to misconducts.
A separate source said there were concerns running through the company that Chief Executive Hiroto Saikawa and others may also be indicted.
Analysts have said it could be difficult for Nissan to avoid blame, whether it turns out that other executives had knowledge of Ghosn’s misconduct, or that the company lacked adequate internal controls.
“Normally, if it’s falsifying the financial filings, the company as well as the perpetrator is charged. That’s not surprising. It’s to be expected,” said prominent lawyer and former prosecutor Nobuo Gohara.
“Now suddenly the issue of CEO Saikawa becomes bigger. It becomes difficult to overlook Saikawa’s role in all of this. That becomes the main focus now.”
Ghosn and Kelly have not made any statement through their lawyers, but Japanese media reported that they have denied the allegations. Calls to Ghosn’s lawyer, Motonari Otsuru, at his office went unanswered.