UPDATE 1-Nissan committee says facts point to private use of company funds by Ghosn

YOKOHAMA, Japan () – An external committee tasked with improving governance at Nissan Motor Co said on Wednesday there were sufficient facts to suspect violations of laws and the private use of company funds by ousted chairman Carlos Ghosn. FILE PHOTO: Former Nissan Motor Chairman Carlos Ghosn sits inside the car as he leaves his lawyer’s office after being released on bail from Tokyo Detention House, in Tokyo, Japan, March 6, 2019. /Issei Kato/File PhotoFollowing a three-month audit of Nissan’s governance-related procedures, the panel said in its report that the concentration of authority on Ghosn was the primary root cause of the alleged misconduct. It also singled out Nissan director Greg Kelly, who has also been indicted, for his alleged role in helping Ghosn avoid oversight. The seven-member committee recommended a majority of directors be independent and that the role of company chairman should be abolished, while an independent, outside director should be chairman of the board. “There are facts sufficient to suspect violations of laws and regulations, violation of internal rules and private use of company funds and expenses… by Mr. Ghosn and Mr. Kelly,” the committee said in its report. “It is clear that there are issues requiring improvement with respect to Nissan’s governance as it could not prevent the misconduct.” Ghosn, who was this month released on $9 million bail after spending more than 100 days in a Tokyo detention center, has called the charges against him “meritless”. Kelly has also denied the charges. “We expect Nissan will take these recommendations seriously and execute them in a swift manner to build the best possible governance structure,” committee co-chair Seiichiro Nishioka told a briefing in Yokohama. Nissan has said that too much power had been concentrated on Ghosn, one of the most feted executives in the global auto industry who orchestrated Nissan’s financial recovery in the early 2000s and created the blueprint for the automaking alliance between Nissan and France’s Renault SA. At the time of his arrest in Tokyo in November on financial misconduct allegations, Ghosn held the chairmanship at Nissan, Renault and Mitsubishi Motors Corp, which together form one of the world’s biggest automakers selling roughly 10 million vehicles each year, while also serving as Renault CEO. Nissan’s board currently comprises nine directors including the chairman, three of whom are categorized as outside, independent directors. Two directors, including one outside director, formerly served senior vice president roles at Renault. Based on the committee’s recommendations, Nissan has said it will put forward proposals to change the company’s governance at its general shareholders meeting in June. Before that, it will hold an extraordinary shareholders meeting next month to vote on the ouster of Ghosn and Kelly, who has been charged alongside Ghosn for understating Ghosn’s salary, as company directors. Additional reporting by Maki Shiraki; Writing by David Dolan; Editing by Keith WeirOur Standards:The Thomson Trust Principles.