Report: Nissan Auditor Repeatedly Flagged Ghosn Payments

Nissan Motor Co.’s outside auditor repeatedly questioned the carmaker’s compensation practices for former Chairman Carlos Ghosn but was assured everything was proper, a source tells Reuters.

Nissan removed Ghosn as chairman last week. He had been arrested on Nov. 19 on suspicion of misusing company assets and hiding about 10 billion yen ($45 million) in compensation over several years.

Nissan CEO Hiroto Saikawa claims Ghosn and Nissan board member Greg Kelly, who also was arrested, master-minded the wrongdoing. But Reuters’ source says EY ShinHihon, the company’s auditor, flagged transactions on several occasions around 2015 that Nissan now claims were improper.

The source claims the firm was assured that the practices and reporting protocols were proper. Neither Nissan nor EY ShinHihon has commented on the Reuters report.

Reuters says EY ShinHihon also questioned the activities of Zi-A Capital BV, a Renault-Nissan affiliate in the Netherlands set up to invest in startups. The unit spent more than 2 billion yen ($18 million) to buy homes for Ghosn’s use. Reuters’ source says Nissan insisted at the time that the subsidiary’s activities were appropriate.

Reuters’s source further asserts that Nissan dismissed the auditor’s questions about the need to declare some 4 billion yen ($35 million) in stock appreciation rights. The right pays Ghosn a cash amount if Nissan’s share price reaches a certain level.