Nissan plans to file a civil suit against ousted chairman Carlos Ghosn to claim for damages resulting from alleged misuse of company funds, a person with knowledge of the issue said, which would add to the high profile executive’s legal headaches.
Ghosn, who remains chairman and chief executive of Nissan partner Renault, has already been charged with three counts of financial misconduct and has been held at a detention centre in Tokyo for nearly two months.
On Tuesday, a Tokyo court denied his request for release on bail, raising the possibility that he may remain in custody for months before his trial begins.
Ghosn denies the charges against him, which include understating his salary for a total of eight years and temporarily transferring personal financial losses on to Nissan’s books.
“The broader investigation (into Ghosn’s alleged financial misconduct) continues to expand, so we will file a suit after that issue has been sorted out,” said a person familiar with the issue who spoke on condition of anonymity due to the sensitivity of the matter.
A civil suit could seek losses related to the alleged use of company funds to pay for the executive’s residences, donations to universities, and payments to a Saudi businessman who is believed have helped Ghosn out of financial difficulties.
Nissan declined to comment on the issue.
Ghosn regularly spent more than 100 days a year flying between Nissan’s headquarters in Yokohama and cities including Paris and had residences in Tokyo, Paris, Rio de Janeiro, Amsterdam and Beirut.
Nissan had been providing those residences to the executive, at a cost of tens of millions of dollars, but people inside the company with knowledge of the issue say the company was only aware that it had been paying rent for Ghosn’s apartment in Tokyo.
Reuters last month reported that payments for some of Ghosn’s residences were portioned out and processed through a Nissan unit in the Netherlands called Zi-A Capital BV and its subsidiaries, which initially had been set up to invest in technology start-ups.
Nissan is reviewing receipts and other financial records to see if purchases of residences and other expenses such as a yacht club membership and donations to universities in Lebanon, Ghosn’s ancestral homeland, had been approved and paid for properly, according to people with knowledge of the issue.
Ghosn’s arrest has sent shockwaves through the auto industry and rocked Nissan’s alliance with Mitsubishi Motors Corp and Renault.
Having been credited for masterminding Nissan’s financial turnaround two decades ago, the executive has since been removed from chairmanship positions at Nissan and Mitsubishi.