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Ghosn may have had questionable ethics: probe

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A huge street monitor broadcasts news reporting Ghosn’s indictment. Reuters

TOKYO (Reuters) – The co-chair of a committee set up by Japanese automaker Nissan Motor Co to examine the root cause of alleged financial misconduct by ousted chairman Carlos Ghosn said he believed Mr Ghosn may have had questionable ethical standards.

Mr Ghosn, charged with three counts of financial misconduct, has been detained in Tokyo since his arrest on Nov 19. Mr Ghosn denies the charges against him, which include understating his salary for eight years and temporarily transferring personal financial losses to Nissan’s books.

“Having read the report on the internal investigation, my initial impression was that the head of the company may have had questionable ethical standards,” committee co-chair Seiichiro Nishioka told a briefing late on Sunday after the panel held its first meeting.

Mr Ghosn said on Sunday he would follow restrictions by authorities in Japan in exchange for his release from jail in the latest effort to persuade a court to grant him bail while he awaits trial.

Mr Ghosn, in a statement released in New York, also said he looked forward to defending his reputation in court.

“Nothing is more important to me or to my family,” he said.

Mr Nishioka, a former judge, added that he also saw problems with Nissan’s governance, including the process of determining compensation for directors.

The panel, comprising three Nissan external directors and four third-party members, expects to meet three or four times before making recommendations to Nissan’s board in March on how to tighten lax governance and approval processes for matters including director compensation and chairman selection.

All seven members attended the first meeting in Tokyo, including Jean-Baptiste Duzan, an external director based in France.

For four hours, they discussed issues with two people involved with Nissan including how power had been heavily concentrated with Mr Ghosn for years, Mr Nishioka said, and possible ways to avoid such focus in the future.

Mr Nishioka added that such a concentration of authority in one person was “questionable”.

Nissan and partner Mitsubishi Motors, in which Nissan owns a controlling 34 percent stake, have been conducting their own internal investigations into alleged wrongdoing by Mr Ghosn.

Renault, which dominates the partnership through its 43.4 percent stake in Nissan, is expected to meet within days to consider potential candidates to replace Mr Ghosn as CEO and chairman, sources have told Reuters.

Despite repeated requests by Renault that Nissan hold an extraordinary shareholders meeting as soon as possible to select a new chairman, Nissan plans to wait for the committee’s recommendations before making its nomination. Nissan’s annual shareholders meeting is scheduled for June.

Mr Nishioka said the committee had yet to discuss possible procedures for chairman selection or governance issues related to the Nissan-Renault partnership including its capital structure. He did not rule out such discussions in the future.

France’s government, which holds a 15 percent stake in Renault and has long pushed for a closer tie-up between Renault and Nissan, has told Tokyo that it will seek an integration of the two companies, most likely under a single holding company, the Nikkei business newspaper reported on Sunday.

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