Not until 2017 did a lone internal auditor, Hidetoshi Imazu, discreetly start making checks into dealings that Nissan now says were orchestrated by Ghosn.
Imazu had been aware of queries by Nissan’s external auditor Ernst & Young ShinNihon about the purpose of a Dutch unit Zi-A Capital, according to one source. Payments for Nissan-owned luxury apartments used by Ghosn were made through Zi-A Capital and its units, sources have previously said.
Imazu’s concerns also followed a June 2017 Reuters report here that Renault-Nissan alliance bankers had drawn up plans to pay millions of dollars in undisclosed bonuses to Ghosn and other managers through a separate Dutch unit, the source said.
Saikawa would only learn of the probe around October last year after Imazu and Hari Nada, head of Nissan’s CEO office and an ally Imazu later teamed up with, had turned their findings over to prosecutors, two sources said.
Nissan declined to make Imazu, Nada and Saikawa available for comment on this article.
Tokyo prosecutors have accused Ghosn of under-reporting $82 million in compensation for 2010-2018 – pay he had arranged to receive after his retirement.
He has also been charged with temporarily shifting personal losses to Nissan after a foreign exchange contract went sour and improperly steering $14.7 million (11.1 million pounds) in Nissan funds to a firm owned by Saudi businessman Khaled Al-Juffali.
Ghosn has said he is innocent and believed the compensation arrangements had been vetted by experts. Both Ghosn and the Khaled Juffali Company have asserted the $14.7 million in payments were for legitimate business purposes.
“Mr. Ghosn is innocent of the charges brought against him and he will be vindicated,” the statement from Ghosn’s spokesman said.
Nissan investigators continue to pursue a number of other leads with the probe expanding as whistleblowers come forward, one source said.
The alleged schemes took so long to come to light, sources with knowledge of the probe said, due to Ghosn’s practice of conveying his wishes verbally to trusted lieutenants rather than in writing. Many payments were made via the ‘CEO Reserve,’ a budget for unplanned expenses, and were made through unconsolidated units which did not require vetting by the CFO or external auditors, they said.
In addition to the case involving Juffali, one key focus of the automaker’s probe is a sum of more than $30 million in Nissan funds Ghosn arranged to have transferred via the CEO Reserve to a Nissan distributor in Oman owned by businessman Suhail Bahwan and whether the money was used to repay personal debt, the sources said.
Ghosn’s spokesman said payments of $32 million made over nine years were rewards for the Bahwan company being a top Nissan dealer. Such dealer incentives were not directed by the CEO and the funds were not used to pay any personal debt for Ghosn, the spokesman said.
One of the Nissan sources said that dealer rewards were a planned event each year and were not paid via the CEO Reserve.
A spokesman for Bahwan did not respond to requests for comment.
The probe is also looking at the amount of money spent on Nissan-owned residences in Paris, Beirut and Rio de Janeiro and how the payments were made through units.
Ghosn’s spokesman said officials at Nissan, including Saikawa and Nada, had been aware of and had approved of the provision of the residences.
Investigators are also examining payments to Ghosn’s sister, Claudine Bichara de Oliveira, for what two sources describe as a fictitious job advising on global donation activities.
Those payments date back to 2003 and total nearly $700,000 through 2016, documents seen by Reuters show.
An internal Nissan letter dated March 27, 2003 shows Ghosn asked Oliveira if she would work for Nissan’s global donation advisory council and that she signed the agreement. A source said, however, there was no evidence that the council existed.
The spokesman, who also represents Ghosn’s sister, said appropriate officials had approved the contract with the sister, and that Nissan officials opposed to Ghosn were attacking his family with false accusations.