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At Nissan, Ghosn settle U.S. SEC claims over undisclosed fee

WASHINGTON (Reuters) – Nissan Motor Co. and its former Chief Executive, Carlos Ghosn agreed to settle claims by the U.s. Securities and Exchange Commission, over false financial information in connection with Ghosn charge, an SEC statement said on Monday.

FILE PHOTO: Former Nissan Motor President Carlos Ghosn leaves the Tokyo Detention House in Tokyo, Japan, April 25, 2019 at the latest. REUTERS/Issei Kato

Nissan will pay the $15 million, and Ghosn agreed to make a $1 million civil penalty and a 10-year ban from serving as an officer or director of a publicly traded U.S.-based company, the SEC statement said.

Ghosn was arrested and imprisoned in Japan, and replaced by Nissan last year. He was ahead of his trial in Tokyo over the financial misconduct charges, which he denies.

A former Nissan, a human resources official, Gregory, Kelly, and agreed to a $100,000 fine and a five-year officer and director ban. At Nissan, Ghosn and Kelly are settled, without admitting or denying the SEC’s allegations and findings.

The SEC also said, in total, Nissan’s financial disclosures omitted more than $ 140 million to be paid to Ghosn, in a pension — an amount that was not paid for it. The SEC has accused Ghosn, in a suit filed in New York, he engaged in a scheme to conceal more than $ 90 million in damages. This package is included as part of the agreement to be announced Monday.

Nissan has confirmed that it had made the allegations, and said that it “is committed to continue to cultivate a robust” corporate governance.”

Nissan’s substantial assistance to the SEC, the agency said. The company has adopted a new governance structure, with three statutory board committees — the audit committee, the compensation and nominations committee, and thus the effects of the reports for all these years.

The SEC said in the beginning, in 2004, the Nissan board of directors has delegated to Ghosn, the authority of the individual director and executive compensation levels, including his own.

The SEC said: “on Ghosn and his staff, including Kelly, are made of a variety of ways to structure the payment of undisclosed damages after Ghosn’s retirement, such as the introduction of the secret contracts, the dates of letters granting Ghosn interest in Nissan’s Long-Term Incentive Plan, and the change in the calculation of Ghosn’s pension benefit is more than $ 50 million in additional benefits.”

“Investors have a right to know how to use it, and how much a company will pay the members of the board. Ghosn and Kelly went to great lengths to hide this information from investors and the market,” said Stephanie Avakian, co-director of the SEC’s Division of Enforcement.

Nissan said earlier this month, CEO Hiroto Saikawa was stepping down after he admitted to being paid extra to be in violation of the rules.

Renault has searched in vain for a full-blown merger with a larger partner, Nissan. It is Japan’s second largest automaker is currently planning to cut about one-tenth of the global workforce – the deepest losses since 2009, and will slash production during the shuttering underutilized plants.

Reports David Shepardson. Editing by Jane Merriman and Tom Brown

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