Nissan faces £17m fine for misreporting Carlos Ghosn's pension

Nissan faces a fine of more than £17.0m related to the carmaker's under-reporting of former chairman Carlos Ghosn's pension.

Japan's markets regulator has recommended a fine for Nissan of 2.4bn yen (£17.2m) to cover the four financial years from April 2014 to March 2018. The financial regulator, the Financial Services Agency, will make the final decision on the penalty based on the recommendation by the Securities and Exchange Surveillance Commission (SESC).

Ghosn was arrested in Tokyo in November 2018 for alleged financial misconduct, including understating his salary by about 9.1 bn yen for almost a decade and temporarily shifting personal financial losses to Nissan. Ghosn has denied wrongdoing.

Nissan said it did not intend to dispute the reasons for the fine or the amount, which would be the second-biggest in Japan for false reporting in a corporate financial statement. Reports had said the SESC would recommend a fine of 4bn yen but that the amount would be reduced if Nissan cooperated. The largest such fine is the 7.3bn yen punishment imposed on Toshiba in 2015.

"The company takes this recommendation extremely seriously and will consider its response after receiving the FSA’s official notice," Nissan said in a statement. "The company expresses sincere regret for any concern caused to our valued stakeholders, and will continue its efforts to strengthen its governance and ensure that the company’s operations reflect full awareness of the importance of compliance."

Nissan's chief executive Makoto Uchida has been left with a big list of problems following Ghosn's sacking. The company reported a 70.0% fall in second-quarter profit in November and cut its full-year forecast.

Japan's second biggest carmaker is under pressure from falling car prices in the US, where Ghosn expanded too fast. Nissan, which employs almost 8,000 people in the UK, is cutting 10.0% of its global workforce and 10.0% of production to reduce costs that surged under Ghosn's leadership.

Maja Korica, associate professor of organisation and management at Warwick Business School, said: "Nissan could have done a lot worse [on the size of the fine] ... Doing all of this, while renewing its senior management teams will leave Nissan's new CEO with plenty to do. In these circumstances, with Ghosn's trial still on the horizon, he may well see the news of the reduced fine as a blessing, giving him one less thorny issue to worry about."