The former head honcho of the Renault Nissan Mitsubishi Alliance, Carlos Ghosn, was charged by Japanese authorities on Monday for violating the country's financial reporting rules.
The charges specifically relate to alleged false disclosures regarding Ghosn's salary made in securities filings for Nissan over a number of years.
Ghosn was charged with another former executive at the alliance, Greg Kelly, over the same alleged salary disclosures. Nissan, as a legal entity, was charged along with its two former executives.
According to the charges, Ghosn and Kelly understated Ghosn’s earnings from 2011 to 2015 by half in Nissan's securities filings: 4.99 billion yen ($44.3 million) compared with 9.86 billion yen ($88.4 million), including bonuses. It has also been alleged that Ghosn used company funds for personal real estate.
Both men have been in a Japanese prison since their arrest on November 19. At the time of their arrest, Ghosn was chairman at Renault, Nissan and Mitsubishi and also CEO at Renault, while Kelly was serving as a representative director at Nissan.
Nissan and Mitsubishi directors voted to fire both Ghosn and Kelly on November 26 due to their arrest, while Renault has only temporarily replaced Ghosn as chairman and CEO as the French firm awaits the full results of the case.
The matter first came to light based on a whistle blower's report at Nissan that was followed up by an internal investigation.
Ghosn and Kelly have not made any statement through their lawyers, but Japanese media has reported that they have denied the allegations. If they plead not guilty, the case is likely to go to trial, and Ghosn could face a fine of up to $6.2 million and 10 years in prison, Nikkei reported.