Accused of transferring personal losses to the company via a third party.
The former supremo of the Renault-Nissan-Mitsubishi Alliance, Carlos Ghosn, has been rearrested for a third time by Japanese authorities on a new set of accusations, this time related to transferring a personal investment loss back to Nissan sometime in October 2008.
The fresh set of allegations stem from some transfers made to a Saudi businessman, whom insiders said helped him to secure a letter of credit for Ghosn following a paper loss he incurred that came up to some US$16.6-million. That Saudi businessman later received some US$14.7-million in funds from Nissan, made in four instalments made between 2009 and 2012. These payments, according to a statement by Japanese prosecutors, were made in the interest of Ghosn and the Saudi businessman, who is named by informed Nissan sources as Khaled Al-Juffali.
Al-Juffali is the vice-chairman of E. A. Juffali and Brothers, one of the largest conglomerate companies in Saudi Arabia, and a member of the Saudi Arabian Monetary Authority. Critically, Al-Juffali is also the co-owner of a company called Al-Dahana, which owns half of a regional joint venture with Nissan Motor Corporation called ‘Nissan Gulf,’ which operates Nissan marketing, sales, strategy, and dealer development activities in Saudi Arabia, Abu Dhabi, Kuwait, and Bahrain.
According to the Japan Securities & Exchange Surveillance Commission, they had flagged Ghosn’s attempt to have Nissan directly shoulder the incurred losses as illegal. Following that, Ghosn then gained the assistance of Al-Juffali, who utilised personal assets to provide collateral for a bank to issue a letter of credit that Ghosn was asked for by the Tokyo-based Shinsei Bank.
Once this arrangement was made, the four payments from Nissan to Al-Juffali (totalling US$14.7-million) were arranged through a Nissan internal discretionary fund (which the company referred to internally as ‘CEO Reserve’) into a Nissan subsidiary, which then made payments to one of Al-Juffali’s companies. The first payment of US$3-million was made in 2009, with subsequent payments of US$3.6-million, US$3.9-million, and US$4.2-million made in the tree subsequent years.
This, according to the prosecutors (and reported by Reuters), Ghosn had “behaved in a way that breached trust, and inflicted damage on the property of Nissan.” The investigation into the allegations continue. Since the Ghosn scandal broke, he has been removed from his positions on both management & board of Nissan & Mitsubishi, while he remains CEO & Chairman of Renault as the French carmaker has found no wrongdoing on his part as boss there.