Nissan's troubles with its former head honcho, Carlos Ghosn, are really costing the company dearly. And the latest one is marching to the tune of of $15 million U.S..
That was the word from Nissan themselves, as they announced that they have a settlement agreement with the Securities and Exchange Commission (SEC) of the United States of America.
You're probably wondering why a Japanese automobile company is being slapped by the US SEC, and the reason is probably because Nissan stocks are also listed and traded in the NYSE. It stands to reason that they fall under the purview of the regulatory powers of the US SEC.
The particulars are rather simple: the SEC was after Nissan for the alleged fraudulent conduct by Carlos Ghosn during his time as Chairman and Representative Director as well as by Greg Kelly, also a former Representative Director. The SEC says that the conduct serves as the foundation for Nissan's liability in the matter.
The SEC is holding Nissan accountable for “material misstatements regarding director compensation”. Such misstatements stood to reason that there was fraudulent declarations in the company's prior annual securities reports that they submit to the SEC. Sources say that Ghosn is accused of pocketing about $5 million illegally.
As such, Nissan agreed to pay the SEC a penalty amounting to $15,000,000 to settle the matter. The SEC agreed, and Nissan says it's final.
Following the discovery of Ghosn's and Kelly's alleged indiscretions with regards to their compensation, Nissan has had to endure tough times financially. In July, they announced that they had an almost 99% drop in operating profit for the first quarter of the fiscal year 2019 (April-June) compared to the same period last year. This prompted Nissan to announce a global job cut of about 12,500 employees.
Sales were also affected, as some of Nissan's biggest markets reported significant dips in sales. In Q1 of FY2019, Nissan says their global sales dropped by 6% to about 1.23 million units.
More recently, Nissan has announced that their CEO, Hiroto Saikawa, has resigned following the discovery of indiscretions regarding company stock and compensation. This came in the wake of Nissan vowing to implement more oversight on the pay of their directors and top brass, Saikawa included. The irony is that Saikawa had been seen by the industry as one of the driving forces behind the ousting of Ghosn.