Carlos Ghosn / Nissan compensation fraud

Nissan's celebrated savior hid $140M of his own pay, then fled Japan folded inside an audio-gear case.

The fifth quadrant, where the thing was never real. The tell is that the story is too clean.

Room: Q-F Fraud
Year: 2018
Impact: $140M
Sector: Automotive
Region: Asia-Pacific
Category: Economic

Why this room

The register places this in qf because the defect was in the representation itself, not in an operational system: the numbers investors relied on to value Nissan's governance were, per the SEC, materially false, omitting more than $140 million of compensation and retirement benefits arranged for the chief executive. The concealment was engineered rather than incidental, using secret contracts, backdated letters granting long-term incentive interests, and a re-calculated pension formula worth more than $50 million, which is the qf signature of a constructed story rather than a broken one. Classification caveat: the corporate and regulatory findings are established (Nissan was convicted in Japan and fined, and Nissan, Ghosn and Kelly settled SEC fraud charges without admitting or denying), but Ghosn personally fled before trial, so the criminal allegations against him remain untested.

The record

The SEC's September 2019 action alleged that Nissan's public filings concealed more than $140 million of compensation and retirement benefits promised to Carlos Ghosn, a sum that was never actually paid out to him.certain
Within that total, the SEC alleged Ghosn schemed to conceal more than $90 million of pay and had his pension recalculated to generate over $50 million in additional benefits.certain
The SEC matter settled on 23 September 2019 with a $15 million civil penalty for Nissan, $1 million and a 10-year officer-and-director bar for Ghosn, and $100,000 plus a 5-year bar for Greg Kelly, all without any admission or finding of wrongdoing.certain
In Japan, prosecutors alleged Ghosn under-reported about 9.3 billion yen (roughly $80 million) of compensation over a decade; Nissan the company was fined 200 million yen (about $1.73 million), and in March 2022 Greg Kelly received a six-month suspended sentence, convicted on one year's worth of counts and acquitted on the rest.certain
Ghosn left Japan on 29 December 2019 concealed inside a large box presented as audio equipment, boarded a private jet at Kansai airport and reached Lebanon via Turkey; Michael Taylor was later sentenced to two years and Peter Taylor to one year and eight months, with prosecutors stating Ghosn paid them $1.3 million.certain

Sources

The book

This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.

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